What is refinery margin?
The gross refining margin is the difference between the value of petroleum products, such as gasoline and diesel, when they leave the refinery and the value of the crude oil entering the refinery. These values are determined by the market based on inventory, demand, geopolitical and other factors.
How profitable are oil refineries?
Refining 3 barrels of crude oil to produce and sell 2 barrels of gasoline and 1 barrel of diesel nets profit averaging $17.50 per barrel of crude oil. In the middle between extremes, heavy and light components are blended to make motor fuels such as gasoline, diesel, and jet fuel.
Do refiners benefit from lower oil prices?
However, refiners are benefiting from low oil costs. Specifically, the difference between the monthly average spot price of gas or diesel and the average price of crude oil purchased composes the profit of a refiner. This spread widens as crude prices move down.
Are higher oil prices good for refiners?
The refining side of the business is actually hurt by high prices, because our demand for many petroleum products, including gas, is price sensitive. However, when oil prices drop, selling value-added products becomes more profitable.
How is refinery GRM calculated?
The gross refining margin GRM is the difference between the total value of petroleum products coming out of an oil refinery (output) and the price of the raw material, (input) which is crude oil. The margins are calculated on a per-barrel basis.
How is refining margin calculated?
The GRM (gross refining margin) of a refining company is derived by subtracting the cost of crude oil it consumes from the total market value of refined products it produces. Refining margins are thus dependent on input crude oil cost, product slate, and prices of refined products.
How much does it cost to build a new oil refinery?
New oil refineries are assumed to cost at least $1 billion per 100,000 barrels of daily refining capacity.
Why is low crude oil price bad?
Lower oil prices mean less drilling and exploration activity because most of the new oil driving the economic activity is unconventional and has a higher cost per barrel than a conventional source of oil. Less activity can lead to layoffs which can hurt the local businesses that catered to these workers.
Which country has the most refineries?
United States of America
United States of America. The United States possesses the biggest refinery capacity in the world with 139 operating refineries as of January 2013. Its refinery capacity stood at 17.38 million barrels per day at the end of 2012, accounting for approximately 18.8% of the world’s total refinery capacity.
What’s the average margin for a USGC refinery?
For the week ended March 19, USGC refinery runs averaged 78.9% compared with 70.7% the week earlier, the most-recent Energy Information Administration data showed. Last week’s higher runs shaved the region’s refinery margins, but they still far surpass those of a year earlier.
What’s the average profit margin for a refinery?
But year over year, Q1 2021 margins to date are averaging $10.27/b compared with $8.19/b for Q1 2020. As of March 11, US driving had increased 24% over the Jan. 13, 2020, baseline used by Apple to measure coronavirus mobility trends.
Where can I find information on a refinery?
The information on the non-operating refineries is obtained from their owners, trustees, or management personnel and is current within a few weeks of publication. The data used to construct the charts and graphs on oil production, refinery margins, and crude oil sources is obtained from DNR’s database.
What are the refining margins for Basrah light?
USWC refining margins for Iraq’s Basrah Light—a recent popular import into USWC refineries by Chevron, Valero and BP—averaged $17.25/b for the week ended March 19 before slipping to $16.62/b for the week ended March 26, Platts Analytics data shows.