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by Stockwatch Business Reporter

West Texas Intermediate crude for October delivery added $1.04 to $73.01 on the New York Merc, while Brent for October added $1.10 to $77.15 (all figures in this para U.S.). Western Canadian Select traded at a discount of $13.50 to WTI, down from a discount of $11.20. Natural gas lost 14 cents to $2.06. The TSX energy index added a fraction of a point to close at 284.55.

The oil patch braced for disruptions as railway giants Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC) shut down the country's freight rail network overnight, having failed to reach labour agreements with the Teamsters union. The union and the railways have been at an impasse for months. Negotiations, now involving federal mediators, resumed today. In the meantime, CPKC said the decision to proceed to a lockout was necessary to try to "protect Canada's supply chains" from the risk of strikes during peak shipping periods in the fall.

As discussed Monday, the oil patch will likely emerge from a (short) shutdown relatively unscathed, given the diminishing importance of crude-by-rail shipments. The sector has nonetheless thrown its support behind business groups that have issued warnings of dire economic consequences. "Railways are strategically vital to Canada's economy, moving over $380-billion in goods annually. ... We urge the government, rail companies and unions to swiftly resolve the dispute," read a statement from Lisa Baiton, president and chief executive officer of the sector's main lobby group, the Canadian Association of Petroleum Producers (CAPP). (Late in the day, the federal government ordered an end to the stoppage and sent the disputes for binding arbitration.)

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