EME 801
Energy Markets, Policy, and Regulation

Summary and Final Tasks

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Summary

In this lesson, you learned a little bit about the process of refining crude oil (which itself does not have many direct uses or substantial economic value) into end-use products like gasoline and diesel fuel. Most refineries in the U.S. are engineered to maximize gasoline production, leading to the 3-2-1 crack spread method of assessing refinery profitability. You also learned that part of the volatility of petroleum product prices is due to seasonal factors; part is due to swings in the price of crude oil; and part is due to how tight refining or production capacity is. When capacity is tight, small shifts in the supply/demand balance can lead to disproportionately large price fluctuations.

Reminder - Complete all of the Lesson 2 tasks!

You have reached the end of Lesson 2! Double check the What is Due for Lesson 2? list on the first page of this lesson to make sure you have completed all of the activities listed there before you begin Lesson 3. Note: The Lesson 3 material will open Monday after we finish Lesson 2.

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