Gas oil crack spread ice

Myself and my clients almost always trade the exchange-support implied futures spread as one product instead of legging the components. I have no earthly idea who is on the other side of my electronic trades - and I don't want to know because I don't want to be spooked out of taking it.

Trader "Sounds like perhaps it depends upon what the spread itself is doing, not the hedging considerarions a producer would have" Bingo! It's not that I don't care what the producers are doing, but price is price, and I get paid on price. Thanks again, bone! Reading your posts is one hell of an education! Especially seasonally if they come in every year and do it. But of course sometimes the macro market takes over such as last year when the crack was at 0, that would have been a nice buy.

Agreed - and price action accounts for producer bias. You must log in or sign up to reply here. Your name or email address: Do you already have an account? The chart above shows recent trends in a single product crack spread, or the difference between the U. Gulf Coast conventional gasoline spot price the black line and the Louisiana Light Sweet crude spot price the blue line. Crack spreads can be positive the grey shaded region or negative the red shaded region , depending on relative product prices.

By comparing the price of crude oil which is set in a global marketplace with the price of refined products which can be affected by local and seasonal factors , crack spreads can often give an indication of supply conditions in a given market. Add us to your site. Today in Energy. June 2, An introduction to crack spreads U. Gulf Coast conventional gasoline crack spread Crack spreads are differences between wholesale petroleum product prices and crude oil prices.

Crack spreads can be calculated using either a single product or multiple products: Single-product crack spreads: A single-product crack spread reflects the difference in value between a barrel of the specified product and a barrel of crude oil. A common single-product crack spread is the gasoline crack spread, as shown in the figure. It is possible to use various combinations of crude oil and refined products to calculate crack spreads.

Gulf Coast market compared to the price of crude oil.