RE:Record Crack spread $68.74 just look at the diesel pump price, it's close to 2$/liter in alberta and $2.4 in vancouver, just insanely good (or bad depending which side one is on). On the first pass, light crude yields ~30% diesel/jet fuel while heavy crude yields ~ 21% diesel/jet fuel. However, heavy crude has more heavier ends ~63% which can be hydrocracked, hydrotreated to yield additonal low to ultra low sulfur diesel/jet fuel. Producers with upgraders and refineries are printing money now. Since heavy oil cost less than light oil, the profit margin per barrel of heavy oil can be higher than a barrel of light oil after processing.
U.S. Energy Information Administration - EIA - Independent Statistics and Analysis
lifeisgood1010 wrote:
Being invested in SU, i track carefully the crack spread.
The last time i posted it on this board, it was at and all time high
Everytime i think that this can't go higher, it proves me wrong.
Crack spread(The profits that a refiner make by converting oil into gasoline and heating and diesel)
It was $46.22 on March 4th
It's a fonction of the price of gasoline and heating oil vs the price of oil.
Surely, the profitability fluctuate for each refiners depending on the price of the feadstocks
they pay and the price they get for the end products.
But all in all, the calculation of the crack spread will gives you a very good indication of
the profitability of a refiner.
And right now, they stand a record high and that is BIG TIME RECORD HIGH.
If i look back at my spread sheet that goes back to 2007, i would say that the average spread is in the mid to high teens.
The lowest i have on record is $4.13
Right now, it's at $68.74.It crossed the $50 mark on April 13th and it keeps on climbing.
I don't think these incredible margins are priced in the stock.