Crack spread
TradingDefinition
Difference between the price of refined products (gasoline, diesel) and the price of crude oil that produced them. Captures refiner profit margins. Quoted in $/barrel or in ratios (3:2:1 = 3 barrels of crude → 2 of gasoline + 1 of distillate).
Refiners (VLO, MPC, PSX) earn the crack spread. Wide cracks (2022) signal refining capacity tightness; narrow cracks signal oversupply.
Refiners (VLO, MPC, PSX) earn the crack spread. Wide cracks (2022) signal refining capacity tightness; narrow cracks signal oversupply.