US railroad shipments of petroleum have dropped as crude and refined products prices fall to the lowest level in more than a decade.
US railroad loadings of petroleum and related products during the week ended on 28 March dropped by 11pc compared with the same week in 2019. A month earlier, during the week ended on 29 February, volume was up year on year by 13pc.
Despite last week's reductions, full-month loadings in March for petroleum and related products were up by 3.5pc compared with the same time in 2019. Until March, railcar shipments of petroleum and related products had consistently increased year on year.
Canadian volumes also have fallen since hitting all-time highs earlier in 2020. Railcar loadings during the week ended on 28 March were down by 3.7pc compared with a year earlier.
US benchmark crude prices fell to near $20/bl this week, the lowest since February 2002. US Gulf coast conventional gasoline prices last week dropped to the lowest level in more than 21 years. Negative profit margins for making gasoline have prompted Gulf coast refiners to cut runs by 20pc-30pc, approaching the 60pc-65pc minimum run rates.
That has affected tank car loadings of petroleum and related products, according to new data from the Association of American Railroads (AAR).
"The recent collapse in oil prices is hurting rail shipments of petroleum products, fractionation sand and steel products," AAR senior vice president John Gray said.
Automobile and parts shipments continued to drop sharply because manufacturing has been curtailed.
The number of railcars loaded in the US with automobiles and auto parts fell by 70pc last week, according to AAR data. The week before that, rail volume fell by 7.1pc. And the week before that, automotive loadings rose year on year by 6.6pc.
"Rail traffic numbers confirm that the coronavirus is taking a toll on the economy," Gray said.
Overall, US railroads loaded 449,767 carloads and intermodal units during the week ended 28 March, down by 12pc compared with the same period last year. A week prior, during the week ended on 21 March, volume was down by only 8.6pc.
"While there remain more unknowns than knowns about the next few months, there are tidbits of encouraging news," Gray said.
March was the best month for rail chemical carloads in two years. Grain railcars loaded in March were up compared to March 2019, the first time in a year that has occurred.
Coal loadings did increase last week by 0.1pc compared with the same week in 2019, but the comparison was skewed because shipments in spring 2019 were delayed by heaving flooding in the midcontinent.
