September 2005

Trends and Resources

HP Impact: HPImpact: High differentials in prices benefit refining margins

It seems like an oxymoron to argue that high crude prices improve refinery economics. But, this time, it holds true in the framework of a new plateau rather than a cycle. A recent analysis by Fereidun..

Weirauch, Wendy, Hydrocarbon Processing Staff

It seems like an oxymoron to argue that high crude prices improve refinery economics. But, this time, it holds true in the framework of a new plateau rather than a cycle. A recent analysis by Fereidun Fesharaki and Alexis Aik of FACTS Inc. (www.factsinc.net) takes a look at trends in downstream margins. Refining economics. High crude prices raise feedstock costs for refiners, while product prices do not rise fast enough. This usually affects margins negatively. But, recently, other forces are at work. High prices are leading to high differentials between sweet and sour crude and light and heavy product prices. This automatically leads to better refining margins. The s

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