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Following closely on the heels of news that oil companies have begun investing hundreds of millions of dollars on trains and depots to move oil coming out Alberta and North Dakota, is news that the Keystone XL pipeline has passed over a significant hurdle toward construction.
While more than half the world’s oil averaged $110.13 a barrel in the fourth quarter on the New York Mercantile Exchange, and the West Texas Intermediate benchmark grade averaged $88.23 a barrel, Canada’s Western Canada Select benchmark showed $61.23 per barrel of oil-sands crude. In December, the Western Canada Select value was at a record discount to the West Texas Intermediate, with as much as a $42.50 gap between the two.
That crude oil made oil companies salivate. Plains All American Pipeline LP (NYSE:PAA) said that more than $1 billion would be going into rail depot projects funded by companies in the oil industry. Some companies are simply buying rail terminals, as Inergy Midstream LP (NYSE:NRGM) spent $425 million to do in November, while others, like Enbridge Inc. (NYSE:ENB), are building their own terminals…
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