Free Republic

U.S. oil refining margins, also known as the 3-2-1 crack spread, jumped to a three-month high on Tuesday — and that’s an indication the country faces an ongoing product shortage that might lead to higher gasoline and diesel prices at the pump. The 3-2-1 crack spread is a great indicator to gauge fuel product tightness. High spreads indicate gasoline, diesel, jet fuel, and other petroleum products are in short supply, while low spreads mean an abundance of supply. Spread direction is also important — if rising, it would mean fuel inventories are declining. The simple calculation of refining margins is...

Excess supply of gasoline coupled with slow demand has pressured refiners margins, Reuters reports, noting refining margins for the fuel in the United States sank to US$45.70 a barrel yesterday. The drop follows the fourth weekly increase in gasoline inventories in the U.S., all of them quite hefty, leading to an all-time high of gasoline supplies, at 259.6 million barrels as of January 18. Over the last four weeks, the Energy Information Administration reported gasoline inventory builds reaching a combined 26.6 million barrels. However, the United States is not the only large gasoline hub where inventories are rising as demand...

CALGARY -- With oil prices currently sky-high, it's a great time to be in the energy business - unless you own a refinery. The record oil prices that are pushing up producers' profits are also dampening demand for petroleum products, creating a glut of North American gasoline reflected by five-year inventory highs. And while gasoline prices have soared to well over $1.20 a litre in Canada, the surplus stocks mean they haven't kept up with the soaring price of crude oil. As a result, the "crack spread" - the difference between the price of crude and the products refined from...