CVRR’s refining margins
CVR Refining’s (CVRR) refinery throughput in the third quarter rose to 219,000 bpd (barrels per day) from 214,000 bpd in Q3 2017. The company’s refining margin for the quarter rose to $15.41 per total throughput barrel from $13.05 per barrel in Q3 2017. CVR Refining’s refining margin was $12.61 in Q2 2018.
As the above graph shows, CVR Refining’s refining margin has improved in 2018. Refining margin represents the difference between net sales of refined products and cost of materials, primarily crude oil. Refining margin per barrel is calculated by dividing refining margin with total throughput barrels. Refinery throughput represents total barrels of crude oil and blendstock inputs in the refinery for the period.
Crude oil differentials
Wider crude oil differentials also contributed to CVR Refining’s performance in the third quarter. The WTI (West Texas Intermediate) less WTS (West Texas Sour), WTI less WCS (Western Canadian Select), WTI less condensate, and Midland-Cushing differential all were significantly higher in Q3 than in the year-ago period.
CVR Refining expects its total throughput to range between 215,000 bpd and 225,000 bpd in the fourth quarter. Valero Energy (VLO) is scheduled to release its Q3 results on October 25, and Marathon Petroleum (MPC) is scheduled to report on November 1.
Let’s take a look at analysts’ recommendations for CVR Refining in the next part of this series.