3 A B C D E F G H I J K L M N O P Q R S T U V W Y

Crack spread

Crack spread, used in the oil and gas sector, compares the prices of just one or two refinery output products to the cost of the crude oil used to make them. Like Gross Product Worth, crack spread can be used to estimate refining margins, however crack spread is intended as a simple, quick measure.

Crack spread is often based on a single product, typically gasoline, but multiple products can be included. The 3:2:1 crack spread is well known in US oil refineries, which generally produce about 2 barrels of gasoline for every barrel of distillates (distillates include diesel and home heating oil). The 3:2:1 crack spread is calculated by subtracting the price of 3 barrels of oil from the total price of two barrels of gasoline plus one barrel of distillates.