Refining Economics
The spreads that decide which fuels are cheap and why. Derived figures are computed from real EIA/FRED inputs and labelled 'derived' with their full provenance chain. Marine fuel-oil spreads that need commercial assessments are gated honestly.
Spreads that matter
Underlying inputs (live)
The real series the spreads are built from — full transparency on every derivation.
Fuel-oil structure
Fuel oil sits at the bottom of the barrel. Its price relative to crude (the fuel-oil crack, usually negative) tells you how much refiners are "giving away" the residual cut. A weak (more negative) fuel-oil crack means cheap HSFO — good for scrubber-fitted owners. The VLSFO–HSFO spread then sets the return on a scrubber. Brent term structure (backwardation vs contango) signals tightness and floating-storage incentives that feed back into tanker demand.
Absolute marine fuel-oil cracks need a commercial assessment; the crude/distillate cracks above are live and free.
Crude relationships
Brent–WTI reflects waterborne vs landlocked crude and the cost to arb US barrels to global markets. A wide Brent premium pulls US crude exports up, lifting ton-miles (VLCC/Suezmax demand) and US Gulf bunkering. The crude curve (front vs deferred) drives storage economics: deep contango can park crude on tankers as floating storage, removing ships from the spot fleet and firming freight.
Why crack spreads matter
What: The margin between a refined product and the crude used to make it (product price minus crude, in $/bbl).
Why: It signals refinery profitability and product tightness; fuel-oil and distillate cracks shape bunker prices.
How traders use it: A trader reads a strong diesel crack as bullish for MGO and a weak fuel-oil crack as supportive of cheap HSFO.