Crack oil gas

The catalyst is a solid sand-like material that is made fluid by the hot vapor and liquid fed into the FCC much as water makes sand into quicksand. Because the catalyst is fluid, it can circulate around the FCC, moving between reactor and regenerator vessels see photo. The FCC uses the catalyst and heat to break apart the large molecules of gas oil into the smaller molecules that make up gasoline, distillate, and other higher-value products like butane and propane.

After the gas oil is cracked through contact with the catalyst, the resulting effluent is processed in fractionators, which separate the effluent based on various boiling points into several intermediate products, including butane and lighter hydrocarbons, gasoline, light gas oil, heavy gas oil, and clarified slurry oil. The butane and lighter hydrocarbons are processed further to separate them into fuel gas mostly methane and ethane , propane, propylene, butane, and butene for sale, or for further processing or use.

The FCC gasoline must be desulfurized and reformed before it can be blended into finished gasoline; the light gas oil is desulfurized before blending into finished heating oil or diesel; and the heavy gas oil is further cracked in either a hydrocracker using hydrogen and a catalyst or a coker. Crack spreads can be calculated using either a single product or multiple products: Single-product crack spreads: A single-product crack spread reflects the difference in value between a barrel of the specified product and a barrel of crude oil.

A common single-product crack spread is the gasoline crack spread, as shown in the figure. It is possible to use various combinations of crude oil and refined products to calculate crack spreads. Gulf Coast market compared to the price of crude oil. For the crude oil price, one could use the price for either West Texas Intermediate WTI crude oil, which has recently been impacted by transportation bottlenecks at the main WTI market hub, or Louisiana Light Sweet LLS which has not been affected by bottlenecks and has continued to move closely with comparable quality global supply streams.

Other alternatives involve calculating the gasoline crack spread in different locations RBOB crack spreads in New York Harbor versus the Gulf Coast or using different types of gasoline conventional crack spreads versus RBOB crack spreads.

Multiple-product crack spreads: The most common multiple-product crack spread is the crack spread. A crack spread reflects gasoline and distillate production revenues from the U.

This is the most common crack spread play, and it is called the crack spread. Of course, it is a bit of an oversimplification of the refining process as one barrel of oil doesn't make exactly one barrel of gasoline and, again, different product mixes are dependent on the refinery. So there are other crack spread plays where you buy three oil futures and then match the distillates mix more closely, as two barrels worth of gasoline contracts and one worth of heating oil, for example.

This is known as a crack spread and there are even crack spreads, and they can also be used as a form of hedging. For most traders, however, the crack spread captures the basic market dynamic they are attempting to trade on. Generally, you are either buying or selling the crack spread. If you are buying it, you expect that the crack spread will strengthen, meaning the refining margins are growing because crude oil prices are falling or demand for the refined products is growing.

Selling the crack spread means you expect that the demand for refined products is weakening or the spread itself is tightening due to changes in oil pricing, so you sell the refined product futures and buy crude futures. Even if you aren't looking to trade the crack spread itself, it can act as a useful market signal on potential price moves in both the oil and refined product market. If the crack spread widens significantly, meaning the price of refined products is outpacing the price of oil, many investors see that as a sign that crude oil will eventually rise in price to tighten the spread back up to historical norms.

Similarly, if the spread is too tight, investors see that as a sign that refiners will slow production to tighten supply to a level where the demand will restore their margins. This, of course, has a dampening effect on the price of crude oil. So, whether you intend to trade it or not, the crack spread is worth keeping an eye on as a market signal. Energy Trading. Actively scan device characteristics for identification. Use precise geolocation data.

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