Oil Boom Keeps Driving Increases In North America Rail Traffic

With Americans' restored appetite for new cars and the U.S. domestic energy market booming, rail traffic in North America continues to build up steam.

On Thursday the Association of American Railroads (AAR) said North American rail traffic rose 3.6 percent over the same week last year.

The leading commodity groups that posted increases from the same week in 2012 were motor vehicles and parts, up 14 percent thanks to soaring auto sales. Petroleum and petroleum products posted similar increases of 14.4 percent.

Rail traffic shows no signs of falling, especially in the North American energy sector as oil producers are looking for a way to transport crude oil from the U.S. Midwest to refineries.

Until recent years, U.S. crude was shipped north and east, from the oil hub in Cushing, Okla., but as more oil is produced in the Upper Midwest and in Canada, refineries in the eastern and northern U.S., as well as in Canada, have not been able to keep up with the glut.

The best way to transport the crude oil is by rail since there is no significant pipeline network in place, John Felmy, chief economist at the American Petroleum Institute, told International Business Times. “So, I think [railroading] will fit in well in terms of all of our shipping aspirations," he said.