Larry Livingstone

Winter Heating Oil, Nat. Gas and Crude Oil Preview

Hi Tim, good article. Isn't the crack spread for gasoling also interesting here? December is currently at $3.27 which is more than a dollar below the cash operting cost to refine...why would the refiners work at a loss?
Also, do you know if there is an exchange out there that lists a spread between Natural Gas and heating oil? That ratio is around 45% lower than the hostroical norm and with 85% historic correlation, should revert to the mean over time...

Tracking Crack Spreads

Hi,

Great article. With the crack spread on gasoline for Oct trading at around $0.33...wouldn't you say this is a good time to buy the spread? P.S. you said that buying the spread entails buying crude and selling gasoline but in essence you want to sell crude and buy gas to bet that either crude price will fall or gas price will rise or both right? or am i missing something here?