3-2-1 Crack Spread
3-2-1 Crack Spread — The headline refining margin indicator. Models a refinery converting 3 barrels of crude oil into 2 barrels of gasoline and 1 barrel of diesel. Calculated as (2 × RBOB + 1 × ULSD − 3 × WTI) / 3. Above $20/bbl is healthy for refiners; below $10/bbl signals margin pressure.
EIA — Petroleum Prices
WTI Crude Oil Spot Price — West Texas Intermediate benchmark. The feedstock cost for U.S. refiners. Rising crude squeezes refining margins unless product prices keep pace.
U.S. Regular Gasoline Retail Price — National average pump price for regular unleaded. The gap between this and spot/wholesale prices represents the retail fuel margin.
U.S. Diesel Retail Price — National average diesel pump price. Diesel margins are typically higher and more stable than gasoline, and diesel demand correlates with freight/economic activity.
RBOB Gasoline Spot Price (Gulf Coast) — Wholesale gasoline price at the Gulf Coast trading hub. The difference between this and retail is the distribution + retail margin. Key input to the crack spread.
Ultra-Low Sulfur Diesel Spot Price (Gulf Coast) — Wholesale diesel/heating oil price. The "heating oil" leg of the crack spread. Spikes in winter or during refinery outages.
EIA — Supply & Capacity
U.S. Crude Oil Stocks — Total commercial crude inventories (thousand barrels). Rising stocks signal oversupply and tend to push prices down. Draws (falling stocks) signal tightness and support higher prices.
U.S. Motor Gasoline Stocks — Total gasoline inventories. Seasonal builds ahead of summer driving season are normal. Unexpected draws can spike wholesale prices and widen retail margins.
U.S. Refinery Utilization Rate — Percentage of operable refining capacity in use. Normal range is 85–95%. Drops below 85% usually mean turnaround season or unplanned outages, which tighten product supply and widen crack spreads.
BLS — Economic Indicators
CPI: Gasoline (All Types) — Consumer Price Index for gasoline. Tracks how pump prices move relative to the 1982-84 baseline. A rising index signals fuel inflation, which can trigger political/regulatory pressure and dampen demand.
CPI: Fuel Oil — Consumer Price Index for heating oil. Reflects home heating cost trends tied to the same refining output as diesel. Spikes indicate tight distillate supply.
CPI: Energy — Broad energy component of CPI covering gasoline, electricity, natural gas, and fuel oil. When this rises sharply, demand destruction and political scrutiny follow.
PPI: Petroleum Refineries — Producer Price Index for refinery output. When PPI rises faster than CPI, refiners are capturing more margin; when CPI rises faster, retailers are.
Employment: Oil & Gas Extraction — Upstream workforce size (thousands). Declining employment signals reduced drilling and potential future supply tightening.