Oil prices relative to gas

Oil in power

  • The fuel oil crack spread (the discount of heavy fuel oil to crude in dollars per barrel) has narrowed by around $2/bbl (12.5%) from April levels as the weather in the Middle East has become hotter. Heavy fuel oil is widely burned in power stations in the region during the peak summer demand season, when electricity use for air conditioning peaks. 
  • Fuel oil crack spreads have narrowed since 2014 as refineries have been upgraded, particularly in Europe which is a key supply region. This allows more fuel oil to be converted into higher-value products, such as diesel, which typically sell at a premium to crude. Heavy fuel oil sold at a discount of as much as $25/bbl to Brent crude in spring 2014, but the difference has narrowed to around $15.75/bbl this year.

Log in or register for a free trial to continue reading this article

Already a subscriber?

If you already have a subscription, sign in to continue reading this article.

Sign in

Not a subscriber?

To access our premium content, you or your organisation must have a paid subscription. Sign up for free trial access to demo this service. Alternatively, please call +44 (0)20 3004 6203 and one of our representatives would be happy to walk you through the service.

Sign up