People often say, "What a difference a year makes!" Well, in the world of rail cars, lately it's been more like "What a difference a year and a half makes!" Back in June 2014, the rail equipment market was dominated by the energy industry, which had a seemingly unending appetite for crude oil tank cars and frac sand covered hoppers. The demand for new rail cars to support the energy industry was still strong. Oil prices were at or above $100 per barrel (bbl). The Bakken-West Texas Intermediate (WTI) spread was above $15 per bbl. New rail-car orders were rising. Builders were increasing production rates, deliveries were growing and the backlog was just short of 100,000 cars. The tank-car fleet was almost 100 percent utilized. Lease rates, new car prices and margins were strong. And the rail equipment sector was being rewarded by Wall Street with favorable valuations and rising stock prices.
展开▼
