Netback

Netback,

Netback: What is the Meaning of Netback?

  1. A summary of all expenses related to the revenue from having a unit of oil in the netback market and the sale of all products manufactured by this unit. This is expressed as gross margin per barrel.

    • Only oil producers use the term netback.
    • Netback is a summary of all costs associated with marketing a product unit.
    • Net prices can be used to compare an oil producer.
    • Manufacturers can test profits by looking at net income over time.

Meanings of Netback

  1. A way to explain (discount) the price of crude oil by reducing the cost of processing and transportation from the overall cost of the improved product.

  2. From the selling price of crude oil: better calculated by reducing the cost of processing and transportation from the total cost of the product.