In last Thursday's "Did the Oil Market Just Guarantee President Obama's Reelection?" I had a throway line:
...This week's thirteen percent decline in crude should, barring a bizarre widening in the already large crack spread, bring gasoline prices down below the $4.00 line in every state except Hawaii and that place in Alaska where it's going for $8.20/gal....Crack spreads are just part of the weltanschauung for anyone who aspires to any success in global macro.
A couple weeks ago, in "Short 'em All. They Aren't Worth the Paper They're Printed On" I tried to do the word picture thing:
As I'm flipping between terminals and feed-readers it strikes me that I'm not interested in any of the news stories I'm looking at.and the atmospherics via an 'Adam Smith' quote:
Valero reports nice crack-spreads but the stock appears to have double-topped....
...Occasionally in those more leisured days I would sit with him lazily watching stocks move, like two sheriffs in a rowboat watching catfish in the Tennessee River….”Here's FT Alphaville on the latest:
There’s no change for the US driver…
… because the gasoline crack (the difference between the price of crude and the price of gasoline — a key metric in determining whether there’s enough incentive for a refinery to process crude) is roofing.Those crack spreads are gross profit for the refiners.
So, even though oil prices have done this...MORE
Here's the EIA's list of the largest U.S. refineries, of the purer plays (fewer upstream operations) Tesoro has the best looking stock set up.