RE:RE:321 Crack Spread plummets 50% in 30 daysYes, no worries.
Glad you do these calculations projecting these numbers into SU earnings.
Crack spreads are very subjective.
There are many variables and iterations of the crack spread, also very dependent on the contract months used in the calculations, when the contracts roll, etc.
To get an easy understandable chart to display for my post, I used this link:
https://en.macromicro.me/collections/19/mm-oil-price/4376/crude-oil-cracking-spread-vs-wti To see it live on Tradingview, I use this input as a composite symbol on NYMEX:
(28*RB1!+14*HO1!-CL1)/(28*RB1!+14*HO1)*CL1!
SU seems to like to use the 221.
The 321 is most commonly used, but not entirely correct in the real world, as crude grades vary so much.
Depending on the crude, a 42 gallon bbl of oil will make about 19 gallons of gasoline, 10 gallons of diesel, 4 of jet, and 9 gallons of 'Other Stuff' like LPG, lubricants, heating oil, and tar.
What it all distills down to (pun intended) is that while SU will rake in more on the upstream side and their SCO sales going forward, they will not see the same proportional increase in profits on the refining and retail side.
Overall it is a net win, and since products still remain at the same prices, it does not push a massive inflationary hike onto the consumer and our economy.
lifeisgood1010 wrote: Good morning Migraine, don't want to split hair with you but i keep track of daily spreads.
On Aug. 25th the 3-2-1 was $39.97US or $54.32 CDN
And as you point out it has fallen quite a bit
As of this writting, the 3-2-1 is $24.34US or $32.85 CDN.
This $32.85 is still much higher than the average of the last 17 years of the mid to high teens.
What some may not get is that while the spreads have gone down, the rise in WTI as more then made up for the lower refining margins.
As per my calculations.EPS for SU were going to be higher by 47 cents at the end of August.
Fast forward 1 month and EPS are going to be higher by about 60 cents.
From the end of August to today, uptream is adding 22 cents and downstream is substracting 9 cents on the EPS
At the end of August WTI was $83.63 US or $112.97.Right now, $92.81 or $125.23
For my EPS addition or substraction, i use very conservative numbers.
650,000 b/d for upstream and 420,000 b/d for downstream
Thank for all of your informative posts