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Canadian Commodity Index declines along with oil and gas prices

For a third month in a row, commodity prices have fallen in Canada, according to the latest Scotiabank Price Index.

It shows prices were down by 3.8 per cent, with the Oil and Gas Sub-Index leading the decline down 8 1/2 percentage points in October.

Patricia Mohr, an economist with Scotiabank, said the main reasons for the decline are lower oil prices and a buildup of light oil in the United States.

She also noted transporting product has been a problem, as Albertans are getting around $26 less per barrel than the world market, but she said railways are starting to pick up the slack.

“Particularly for heavy crude, if we were able to move the crude down to Houston we would’ve gotten prices equivalent to Mayan heavy crude,” Mohr said.

She said that would bring the price up as moving by rail is more expensive than through a pipeline.
With 700,000 barrels a day expected to be moved by rail in 2014, Canadian crude could reach other markets.