Low oil prices good for economy, CSX and its customers - CEO

By Nick Carey

CHICAGO (Reuters) - Falling oil prices should benefit U.S. consumers and railroad customers, and be good for rail business in the months ahead, the chief executive of No. 3 U.S. railroad CSX Corp said on Wednesday.

"By and large, this (lower oil prices) is a good thing for the economy, for CSX and for our customers," Michael Ward told Reuters in an interview. "It will put more money in consumers' pockets and we will pass on less in fuel surcharges to our customers, which will put more money in theirs."

Late on Tuesday, CSX reported fourth-quarter earnings that met Wall Street expectations and Ward said the railroad expects every quarter in 2015 to be "sequentially better than the one preceding it."

The railroad has also said it will raise prices above the rate of inflation this year as demand continues to rise.

Despite the 50 percent drop in the price of oil since the summer, CSX reported a fourth-quarter increase in crude oil and other shipments. Ward said that during the quarter the railroad handled three and a half trains a day carrying fuel from the Bakken shale formation in North Dakota to refineries in Pennsylvania and New Jersey.

CSX's CEO said as long as oil stays above $30 to $35 a barrel producers can continue to make money on existing wells and the railroad does not anticipate any short-term drop in Bakken fuel heading to East Coast refineries.

"But, sooner or later, someone is going to have to blink when it comes to the supply of oil," Ward said. "The oil-producing countries are getting slammed."

Ward said the Jacksonville, Florida-based railroad expects robust U.S. economic growth in 2015 and, with the exception of export coal and domestic coal shipments, it anticipates growth in all of its main markets.

After scrambling, like the other major railroads, to catch up with an unexpected spike in rail freight demand in 2014 as the U.S. economy began to improve, Ward said all of CSX's customers are now getting freight service.

"They (our customers) are being served more than adequately, though not perfectly yet," Ward said. "We are open for business and ready to handle it."

In trade on Wednesday CSX shares were up 20 cents or 0.6 percent at $33.75.

(Reporting By Nick Carey; editing by Gunna Dickson)