Scrutiny facing Bakken crude rail transport could hurt Hess, Mizuho says

|About: Hess Corporation (HES)|By:, SA News Editor

Hess (HES -2.5%), increasingly reliant on rail to move its growing Bakken output, could be especially vulnerable to the possibility of more regulation on Bakken crude-by-rail transport, Mizuho says (

HES' Tioga rail facility handled 54K bbl/day of crude during Q3 2013, equivalent to 76% of HES' Q3 Bakken production and 83% of liquids production, the firm calculates.

The Bakken already saw softer pricing in Q4; the WTI/Clearbrook differential was $11.53 in Q4 vs. less than $5 in Q3,  and additional costs associated with stricter transport standards could squeeze margins further going forward for HES and Marathon Petroleum (MPC -2.7%), the firm says.