Energy Prospectus

Hi Dan,

Was wondering if you could cover some topics, that might be of benefit for someone who is still learning about the Oil and Gas sector. Perhaps somethings you can cover in your weekly or monthly podcasts
- Refining margins and how do these margins impact oil prices, and what should one look out for ?
- Brent and WTI correlation
- time spreads? crack spreads? what are these and how do oil traders look at these? and how they impact equities of oil and gas companies that you track.

Maybe others can add to the list of such questions..

I never worked in the downstream sector (refiners). My "guess" is that refining margins are determined by the difference in crude oil prices and refined product prices. Since refined product inventories are much lower than normal (DANGEROUSLY LOW FOR DIESEL), the refining margins are high. Why? Because retailers are in a bidding war for supply.

Brent and WTI are similar in quality. Historically, WTI had traded slightly higher than Brent because the U.S. was short oil. Now the shortage is worse in Europe, so demand for Brent is higher.

Understanding "Time Spreads" or "Crack Spreads" is above my pay grade. I don't think they have an impact on upstream equities.

Maybe other EPG members know more about these things.