Railway stocks were lower Monday amid questions being asked about the transporting of crude oil in the wake of a derailment over the weekend in Lac-Megantic, Que., that killed at least five people.
``The multiple is exponential, the amount of oil that is now being shipped by rail versus just even five years ago (and) it's been very accretive to earnings,'' said Paul Vaillancourt, managing director at Fiera Capital in Calgary.
``It's very tragic but at the end of the day we don't think that the railway stocks are going to get crushed on this. One could argue that pipelines could offer a safer alternative and that's maybe the viewpoint that a lot of people in Calgary here.''
Canadian National Railway Co. (
TSX: T.CNR,
Stock Forum) was down 1.15% to $102.27 and
Canadian Pacific Railway Ltd. (
TSX: T.CP,
Stock Forum) was off 0.63% to $126.41.
Meanwhile, stock in pipeline company
TransCanada Corp. (
TSX: T.TRP,
Stock Forum) gained 1.5% to $46.27.
As noted by MarketWatch, analyts at Scotiabank said in a note Monday oil shipments in Canada have almost tripled over the past two years to more than 14,000 car loadings so far this year.
“This has been one of the ways in which markets have attempted to circumvent a shortage of North American pipeline infrastructure,’’ the bank said.
Nearly 234,000 carloads of crude were shipped in 2012 from 9,500 carloads in 2008, according to the Association of American Railroads.
Based on more than 97,000 carloads shipped in the first quarter of this year, the association expects “another big jump” in crude shipments in 2013, MarketWatch said.
(with files from The Canadian Press)