What are refinery margins?
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 much profit does an oil refinery make?
On a per capita basis, that worked out to an average of $1,660 (though the figure also includes spending by industry, government, and businesses, as well as household and personal spending). And while the Northwest is spending, the oil refineries are raking it in, netting as much as $2 billion in profit each year.
How much does it cost to refine 1 barrel of oil?
Crude Oil Cost The cost to produce a barrel varies from about $20 per barrel in Saudi Arabia’s desserts to $90 per barrel for some deep-water wells. In the example below, the crude cost is $1.39 per gallon ($58.26 per barrel).
Can refineries make a profit?
Refiners are able to profit from low input costs and sell their refined goods at prices that do not fall as quickly as crude. 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.
What is average gross refining margin?
Gross refining margin (GRM) is the value addition of products per barrel of crude. Since mid-2020, benchmark Singapore GRM is negative. In Q4, GRM was $1.87 per barrel, well below the long-term average of $6.25.
How is refining margin calculated?
GRM is the difference between crude oil price and total value of petroleum products produced by the refinery. For example, if a refinery receives $80 from the sale of the products refined from a barrel of crude oil that costs $70/bbl, then the Refinery Gross Margin is $10/bbl.
What is oil margin?
Refinery margins are a measure of the value contribution of the refinery per unit of input. Typically this is per barrel of crude oil processed, but it could also include other feedstocks as inputs.
Do refineries make money when oil prices are low?
However, refiners are benefiting from low oil costs. Refiners are able to profit from low input costs and sell their refined goods at prices that do not fall as quickly as crude.
What makes up the gross margin of an oil refinery?
Typically this is per barrel of crude oil processed, but it could also include other feedstocks as inputs. Refiners typically measure margins at several levels to measure different dimensions of performance: Gross margin – This is the difference between the value of the products made and the feedstock (crude and other feed) used to make them.
How is variable cash margin used in refining?
This is typically used to measure the effects of changing market conditions or differences in yield across different refineries Variable cash margin – This subtracts all variable costs (costs associated with running a single unit of feedstock, typically including energy and catalyst and chemicals costs) from the gross margin.
What’s the profit per barrel of crude oil?
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. What is it about crude oil that allows refineries to make fuel?
What was the net margin of oil in 2009?
The net margin is the gross margin 25 minus operating costs per barrel of refined product sold. The negative $0.36-per-barrel net margin of 2009 was the lowest (in terms of 2009 dollars) 26 in the 33-year history of the FRS (see Figure 6, at left) and the only time that a negative net margin occurred.