Key Moments
- Rabobank notes Brent crude climbed from $73 to $104 during Q3, marking a substantial price surge.
- The 3-2-1 crack spread widened sharply from $17 to $62, highlighting significantly stronger refining margins.
- The combined move in Brent and the crack spread reflects an “effective total” increase from $90 to $166, emphasizing tighter energy market conditions.
Q3 Brent Rally and Refining Margin Expansion
Rabobank underscores a pronounced rally in Brent crude oil prices over Q3, with the benchmark rising from $73 to $104. At the same time, the 3-2-1 crack spread – a widely followed measure of refining margins – increased from $17 to $62.
According to the commentary, this dual move means the “effective total” shifted from $90 to $166, underscoring the degree of tightening observed in energy markets.
| Metric | Start of Q3 | Current Level |
|---|---|---|
| Brent Oil Price | $73 | $104 |
| 3-2-1 Crack Spread | $17 | $62 |
| Effective Total (Brent + Crack Spread) | $90 | $166 |
Rabobank Commentary on the Oil Move
Rabobank describes the current configuration of prices and margins as the key development for the quarter, emphasizing that the surge in the 3-2-1 crack spread “is what matters more” for the market, in addition to the outright Brent move.
The commentary states: “Brent oil is $104 right now, well up over a Q3 it started at $73 while the 3-2-1 crack spread is $62 vs. $17, which is what matters more, so we moved from an effective total of $90 to $166.”
Link Between Oil Prices and US Treasury Yields
Rabobank also points to a note mentioning that oil prices and US Treasury yields are being observed in a particularly close alignment.
The article cites: “The FT today notes that oil prices and US Treasury yields are in tightest relationship since 1990 – you mean during the late Cold War, when it was all about geopolitics at core? What a surprise!”
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