Refining Margin
The profit a refiner earns per barrel of crude it processes -- the difference between the value of the refined products it sells (gasoline, diesel, jet fuel) and the cost of the crude and other inputs, per barrel. It is the core profitability metric for a refiner, and it is highly volatile because it depends on the spread between crude and product prices, which moves with demand, inventories, outages, and seasonality. A refiner has little control over this spread (it is set by the market), so the business is fundamentally about running efficiently to capture whatever margin the market offers and about the advantage of processing cheaper crude grades.
Related terms
Absorption Rate · AFFO per Share · Allowed Return on Equity · Alternative Investments · Anchor Tenant · Assets Under Management
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