Wholesale Spot Petroleum and Crude Oil Prices and Crack Spreads

 

HSNO professionals have calculated approximately 50 different loss of profits related to oil refineries in the United States. HSNO clients are primarily law firms and commercial insurance carriers, and have also been retained by refineries as expert witnesses related to financial damages in subrogation cases.

HSNO tracks the following on a daily basis:

  • Crack spreads for the US Gulf Coast (LLS) 3:2:1 Crack Spread
  • Crude pricing (WTI, Louisiana Light and Brent)
  • Gasoline pricing (RBOB) for NY Harbor, Gulf Coast and Los Angeles
  • Low Sulfur Diesel pricing for NY Harbor and US Gulf Coast

The information tracked by HSNO is from the Energy Information Administration.
A crack spread is a measure of the short term profit margin experienced by refineries. The crack spread represents the difference (or “spread”) between the cost of inputs (crude oil) and the wholesale spot prices of outputs (gasoline & distillate fuel). However, variable & fixed costs are not typically included in crack spread calculations. Crack spreads are commonly presented in the 3:2:1 format, implying that for every 3 barrels of crude oil, a refinery produces 2 barrels of gasoline and 1 barrel of distillate fuel.

For example, a Gulf Coast refinery that processes Louisiana Light Sweet (LLS) crude oil would calculate the 3:2:1 Crack Spread as follows:

  • Sum of the spot price for 2 gallons of gulf coast conventional gasoline and 1 barrel of Gulf Coast ultra-low sulfur diesel. Spot prices are typically reported in dollars per gallon and must be multiplied by 42 to convert to dollars per barrel.
  • Less the cost of 3 barrels of Louisiana Light Sweet crude oil
  • Equals the 3:2:1 Gulf Coast Crack Spread

Cracks spreads can vary widely based on a refinery’s inputs and outputs, which are dependent on the price and availability of feedstocks as well as the price and regional market demand of refined products. Short term disruptions to the market, (such as natural disasters or other pipeline and refinery outages in the area) can also cause temporary spikes in profit margin.

Historical crack spreads for the Gulf Coast are calculated by HSNO with data provided by the Energy Information Administration. You can track the variability of crack spreads for the past year in the interactive chart below. To download all historical data, sign up using the link below!