1. What is a Crack Spread? Is it the same as a Soybean Crush Spread?
No. A crack spread reflects the value added to a barrel of crude oil when it is refined into petroleum products, primarily gasoline and heating oil.
A crush spread, on the other hand, reflects the value added to a bushel of soybeans when it is processed into soybean meal and soybean oil.
2. Does MRCI provide historical crack spread charts?
Yes. MRCI Online subscribers have access to historical crack spread charts within the Special Spread Charts section.
Crack spreads are available as Items #55 and #56.
3. What is the formula to calculate a crack spread?
The formula to calculate a 2-1-1 crack spread is as follows:
spread = 0.42(HO + HU)/2 - CL
where HO and HU are in cents/gallon, and where CL is in dollars/barrel
Thus, the crack spread is expressed in dollars/barrel, the value added to a barrel of oil by refining into its products (similar to the crush spread).
Here’s a link to the CME web site where you can calculate the 3:2;1 crack spread: http://www.cmegroup.com/tools-information/calc_crack.html
