Ok, because I am tired of hearing snickers during various supply chain update meetings, and because the inner chemical engineer in me occasionally wants to burst out, I hereby dedicate today's blog to the 2-minute education of "crack spread".
It is probably not what you think it is - a plumber, a janitor, someone starring in a "special" film.
Really, the term is derived from the pricing difference between crude oil, and the products made by "cracking" the hydrocarbon bonds.
This pricing difference has a lot influencing factors and can be manipulated for gain or loss in many ways. In the world of futures trading and hedging, traders and refineries may sell the contracts owned of specific products while buying others, either trying to hedge their risk or turn a profit.
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