General Lee
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Delta-owned Trainer refinery posts profit
By Linda Loyd, Inquirer Staff Writer
Wednesday, October 23, 2013
Delta Air Lines said Tuesday its refinery in Trainer, Delaware County, posted a $3 million profit for the three months ended Sept. 30.
It was the first quarterly profit since Delta bought the former ConocoPhillips refinery last year to supply itself with jet fuel.
"We have a tremendous opportunity with the Trainer refinery," Delta CEO Richard Anderson told investors on a conference call discussing third-quarter financial results. "Importantly, the refinery's production has proven to be effective in keeping jet cracks in check, particularly in the New York harbor."
The "crack spread" is the difference between the cost of crude oil and the selling price of jet fuel - it is the price paid to refiners.
Airlines can "hedge" the cost of oil by entering into long-term future contracts. But they cannot hedge the crack spread, or the refiners' profit margin, which fluctuates based on supply, demand, and market trends.
"Our next step is to improve the refinery's profitability through lower-cost domestic crude supply from the Bakken field, increase jet fuel output, and operational initiatives to improve throughput and product mix," Anderson said.
Bye Bye---General Lee
By Linda Loyd, Inquirer Staff Writer
Wednesday, October 23, 2013
Delta Air Lines said Tuesday its refinery in Trainer, Delaware County, posted a $3 million profit for the three months ended Sept. 30.
It was the first quarterly profit since Delta bought the former ConocoPhillips refinery last year to supply itself with jet fuel.
"We have a tremendous opportunity with the Trainer refinery," Delta CEO Richard Anderson told investors on a conference call discussing third-quarter financial results. "Importantly, the refinery's production has proven to be effective in keeping jet cracks in check, particularly in the New York harbor."
The "crack spread" is the difference between the cost of crude oil and the selling price of jet fuel - it is the price paid to refiners.
Airlines can "hedge" the cost of oil by entering into long-term future contracts. But they cannot hedge the crack spread, or the refiners' profit margin, which fluctuates based on supply, demand, and market trends.
"Our next step is to improve the refinery's profitability through lower-cost domestic crude supply from the Bakken field, increase jet fuel output, and operational initiatives to improve throughput and product mix," Anderson said.
Bye Bye---General Lee