Distribution costs are higher than they should be, shipping by rail and truck is not efficient except for local deliveries

• Rail transport has come under attack due to the number of explosions and inadequate safety specifications for tank cars, Canada has already set new standards
• New tank car specifications for the United States will ultimately require heavy investment from users
• Pipelines – if the right specs are used, this can be the safest and most efficient way to transport oil and gas
• Unloading facilities for pipeline transport are lacking in key states like California; shipping by truck or rail from North Dakota is very expensive, although a supplier wants to rail the product to Washington State and then ship it up the coast to California , but Washington State doesn’t want a transfer point

World Events

• Negatives are Russian actions in Ukraine, general unrest in the Middle East
• Many media believe that the Russian government has a desire to reclaim the outlying territories that were separated from the Soviet Union during the collapse of communism. Ukraine, Belarus, Lithuania, Latvia and Estonia are still dependent on fuel supplies from Russia.
• These countries have made little attempt to realign infrastructure to source from other countries. Russia considers these countries as its own and wants them back. Does the capture of Crimea represent a single step on the road to the territorial reassembly of Russia?
• Actions or events in Egypt and North Korea could have profound negative effects on prices
• Iraq’s significant increase in oil production and export is positive

Source: www.oil-price.net