What is a crack spread and why should we be worried about it?<\/p>\n
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Oil prices have ebbed and flowed this summer with each new twist in the Iran war, but products made from crude \u2014 the fuels that run our world \u2014 have marched steadily higher.<\/p>\n
Gas and diesel prices decoupled from crude in July, limiting any relief from lower oil prices, and according to economists, they are likely to stay high, even after oil starts flowing again through the Strait of Hormuz.<\/p>\n
Why are oil product prices rising more than oil itself? That has to do with something called a \u201ccrack spread\u201d and a series of supply disruptions that are uniquely putting the squeeze on oil product markets.<\/p>\n
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BofA Global Research describes it as a \u201cperfect summer storm.\u201d<\/p>\n
\u201cThree of the world\u2019s four major refining hubs remain impaired for one reason or another,\u201d said strategists in recent note.<\/p>\n