Refiners minting money

Despite sharply rising input costs, refiners are minting money thanks to a ‘crack spread’ of $1.50 per gallon compared to a mere 30 cents six months back and high capacity utilization due to closure of previously unprofitable refineries under pressure from shareholders.

'For now, that means refiners will go on earning record profits. Shareholders of two independent refiners, Valero Energy and Marathon Petroleum, have enjoyed stock price rises of at least 78 per cent in the last year. The integrated supermajors, Exxon and Chevron have also benefited. ’…


Crack spread is supposed to drive refinery earnings and their share prices.

Experience is that investors are much less sophisticated. They don’t distinguish. Refiners are traded as just another oil stock.

They benefit from rising oil prices, not from crack spread.