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Crack spread is a term used on the oil industry and futures trading for the differential between the price of crude oil and petroleum products extracted from it. The spread approximates the profit margin that an oil refinery can expect to make by " cracking " the long-chain hydrocarbons of crude oil into useful shorter-chain petroleum products.
An especially skewed spread for oil futures or "super-contango" emerged last month, prompting traders to seek quick bargains, store the oil and sell at a greater a profit later.
The crack spread between crude oil and one of its byproducts, reflecting the premium inherent in refining oil into gasoline, gas oil, or heating oil; The spark spread between natural gas and electricity, for gas-fired power stations; The crush spread between soybeans and one of its byproducts, reflecting the premium inherent in processing ...
As with any other spread trade, an intermarket spread attempts to profit from the widening or narrowing of the gap between the two contract prices. For example, an intermarket spread trade might involve buying a contract for West Texas Intermediate Crude Oil (on the Chicago Mercantile Exchange) while selling a contract for Brent Crude Oil ...
Markets in just the past few days have sent a strong signal that moving crude oil by rail may be past a point of no return. When crude oil by rail began roughly 10 years ago, it was somewhat stunning.
Over the past few months, the price difference between the two most heavily traded grades of crude oil -- Brent and WTI -- has plunged. This price gap -- known as the Brent-WTI spread -- has ...
In finance, a spread option is a type of option where the payoff is based on the difference in price between two underlying assets. For example, the two assets could be crude oil and heating oil; trading such an option might be of interest to oil refineries, whose profits are a function of the difference between these two prices.
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