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What are refinery margins?
The gross refining margin is the difference between the value of petroleum products, such as gasoline and diesel, when they leave the refinery and the value of the crude oil entering the refinery. These values are determined by the market based on inventory, demand, geopolitical and other factors.
What is average gross refining margin?
Gross margin is one common measure of refinery margin or economic performance. Gross margin is typically calculated per barrel of crude oil processed and is the difference between the value of the refined products produced and the cost of the crude oil and other feedstocks used to produce them.
How is refining margin calculated?
The GRM (gross refining margin) of a refining company is derived by subtracting the cost of crude oil it consumes from the total market value of refined products it produces. Refining margins are thus dependent on input crude oil cost, product slate, and prices of refined products.
What is refinery crack spread?
The crack spread — the theoretical refining margin — is executed by selling the refined products futures (i.e., gasoline or diesel) and buying crude oil futures, thereby locking in the differential between the refined products and crude oil. It entails selling crude oil futures and buying refined products futures.
Which is the biggest refinery in the world?
Jamnagar Refinery
Jamnagar Refinery, Reliance Industries – India The Jamnagar Refinery, commissioned in July 1999, is a private sector crude oil refinery and the largest refinery in the world, with a capacity of 1.24 million barrels of oil per day. It’s owned by Reliance Industries Limited and is located in Jamnagar, Gujarat, India.
Do oil refineries make money?
Refiners make money when the demand for fuel and value-added petroleum products is high, and they don’t mind when the price for crude goes lower. Both offer a compelling investment opportunity, depending on where the price of crude is.
How do you calculate gross refining margin?
For example, if a refinery receives $80 from the sale of the products refined from a barrel of crude oil that costs $70/bbl, then the Refinery Gross Margin is $10/bbl. The Net or Cash Margin is equal to the gross margin minus the operating costs (excluding income taxes, depreciation and financial charges).
What is the profit margin for crude oil?
As of January 2020, the average net profit margin for the oil and gas drilling industry was 6.8%.
What is the 3 2 1 crack spread?
The 3:2:1 crack spread approximates the product yield at a typical U.S. refinery: for every three barrels of crude oil the refinery processes, it makes two barrels of gasoline and one barrel of distillate fuel.
What is the 3 2 1 crack spread today?
The 3:2:1 crack spread, a rough calculation for a refiner’s margin from converting 3 barrels of crude oil into 2 barrels of gasoline and 1 barrel of diesel, is now more than $21/bbl. During most of 2020, spreads were below $10/bbl, so that represents a doubling from pandemic levels.
Where are the refining margins in the world?
New York — Global refining margins for gasoline weakened across a majority of regions, with most Singapore margins anchored in negative territory and Northwest European margins sliding despite French refinery strikes limiting output, according to an analysis Tuesday from S&P Global Platts. Not registered?
What is the margin for Bonny Light crude oil?
The Bonny Light cracking margin for refiners in the Amsterdam-Rotterdam-Antwerp oil hub averaged $1.91/b the week ended January 17, down from the $2.42/b the week earlier. The crude distillation unit at Total’s 220,000 b/d Donges, France, refinery was to be restarted Friday.
What’s the cracking margin on gasoline in Europe?
Cracking margins for Northwest European refiners are drifting down below the $1/b mark, despite expectations for a “marginal” increase in European demand for the month of January and constrained supply from French plants due to industrial action from unions.
Why was the total refinery in Donges France shut?
The crude distillation unit at Total’s 220,000 b/d Donges, France, refinery was to be restarted Friday. The plant was shut the previous Sunday after strikers blocked refinery access to the port of St Nazaire, cutting off access to crude supply.