Another Crack Epidemic

Crack spreads (profit margins for refinery firms, derived from processing sludgy crude oil into products like gasoline, diesel, jet fuel, even lubricants and asphalt, continue to spike higher in the face of a sharp correction in crude itself since mid-May. 

Courtesy of @Rory_Johnston on X, the first chat, below, shows crack spreads specifically for diesel spiking $10/bbl (per barrel of crude oil) just today. 

Next, there is the CRAK ETF on the second weekly chart, below, which one of our Members flagged earlier. Note the tight pattern in uptrend, up again today. 

There are several ways to read into crack spreads spiking. But the one which seems most logical to me is that the market is picking up on the idea that the actual price of a barrel or crude oil ought to be, and in fact is, much higher than the front month futures contract suggests. I will stop short (no pun intended) of lobbing accusations of market manipulation, though this seems to be a Res Ipsa Loquitur situation. 

However, as we noted yesterday is there truly is a "glut" of oil then we would not be seeing the SPR drained to historically low levels, down to a Congressionally mandated minimum. 

Some refinery stocks of note: DINO PSX VLO.