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Regulator: ND oil rail shipments expected to spike

A oil pumping rig being erected in McKenzie County west of Watford City, North Dakota. By Tim Evanson [CC-BY-SA-2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Wikimedia Commons
A oil pumping rig being erected in McKenzie County west of Watford City, North Dakota. By Tim Evanson [CC-BY-SA-2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Wikimedia Commons

BISMARCK, N.D. (AP) - North Dakota's top oil regulator says producers will increasingly ship more crude by rail to take advantage of better prices at markets not served by pipelines.

State Mineral Resources Director Lynn Helms told the Legislature's Government Finance Committee on Thursday that he expects as much as 90 percent of the state's crude will move by rail in 2014. Rail shipments now account for about 60 percent of crude produced in North Dakota.

North Dakota's oil production is nearing 1 million barrels daily.

Helms says oil prices have been slipping since July. He says it costs more to ship oil by rail than by pipeline, but producers are able net about $24 more per barrel by sending it on trains to U.S. refineries, where premium prices are fetched.

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