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Oil-by-rail shipments up for April

May 3, 2013 at 7:45 AM

WASHINGTON, May 3 (UPI) -- The shipment of petroleum and petroleum products by U.S. rail accounted for the largest increase for commodities in April, a railroad association said.

The Association of American Railroads said the weekly average for trailers and containers last month was around 240,000, the highest average for weeks in April ever.

AAR said nine of the 20 major commodity categories had monthly gains, with petroleum and petroleum products accounting for the largest increase at 46.4 percent year-on-year

AAR Senior Vice President John Gray said shipments by rail painted a mixed picture of the U.S. economy

"There's nothing in the traffic data to indicate that a sharp economic slowdown is imminent," he said in a statement. "On the other hand, there's nothing to indicate that a dramatic uptick in economic growth is imminent either."

Energy companies are turning to rail to deliver oil because the production boom in the United States has outpaced existing pipeline capacity.

The Energy Department said rail shipment of petroleum and petroleum products is more expensive than pipelines but generally offers energy companies a greater degree of flexibility in terms of destination points.

It said rail shipments to East Coast refineries are likely to increase in response to the pipeline focus on refineries set up along the southern U.S. coast, which hosts about half of the domestic refining capacity.

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