It’s good to be a refiner in the United States right now. Public refining companies are starting to report first quarter results, and some of the numbers are staggering.
PBF Energy, an independent petroleum refiner with assets located across the country, reported gross refining margin of $11.36 per barrel in 1Q22, up 3.1x from $3.65 per barrel in the same quarter a year ago.
Similar results are coming in from competitors in refining industry, and stock prices have rallied as a result.
In this chart, we illustrate one version of the crack spread, which is used as a proxy for refining profitability. This particular chart shows the difference between the price of a barrel of diesel (which drives refining revenue) and the price of a barrel of crude oil (the main refining input cost).
Diesel crack spreads, now above $60 per barrel, are easily at their highest levels of all time.
Originally written May 11th, 2022.