Forex Trading

RBOB Gasoline Daily Price Commodity Prices Price Charts, Data, and News

Fluctuations in global demand and how refineries respond to changes in demand can materially affect gasoline prices. The costs of operating refineries and the productivity of those refineries can have a major effect on gasoline prices. Consumers use gasoline for fuel in cars, light trucks and motorcycles as well as recreational vehicles, boats and small aircraft. Oil refiners look at crack spreads when making production decisions. U.S. crude prices were seeing gains of more than $1/bbl, with the NYMEX March West Texas Intermediate crude contract rising $1.15 to $77.93/bbl, placing prices within pennies of the day’s highs. European benchmark Brent crude was seeing more subdued gains, with the March Globex contract increasing 69cts to $83.09/bbl while the more-active April contract was 78cts higher to $82.61/bbl.

  1. RBOB Gasoline is quoted in US cents per gallon and Brent crude oil is quoted in US dollars per barrel.
  2. As a result, RBOB, which does not contain MTBE, has quickly grown in popularity with futures traders, and it has also become the new benchmark gasoline contract.
  3. Today, ethanol is used primarily as motor fuel and a fuel additive.
  4. Do you notice that there are no imports prior to the middle of 2004?
  5. Internal combustion engines, like those found in automobiles, burn fuel in controlled processes.
  6. Industry watchers measure refiners by their capacity, which is the amount of crude oil that can go into distillation units.

The refiner, just like the producer and consumer is incentivised by profits. Fortunately, traders can evaluate refiners profits by analyzing the margins they produce. The profit margins a petroleum refiner sees is referred to as the crack spread. One of the most well-known refinings crack spreads is the RBOB/Brent crack spread. The weekly chart of the RBOB Brent crack spread shows that at times the crack was as high as $28 dollars per barrel and as low as -$5.5 per barrel. When the crack spread is negative there is no incentive for refiners to purchase and refine Brent oil.

Any hypothetical examples given are exactly that and no representation is being made that any person will or is likely to achieve profits or losses based on those examples. Refineries heat crude oil at temperatures of several hundred degrees and place the boiling liquid into distillation columns called stills. The boiling process produces gasoline as well as other products including kerosene and diesel fuel. Gasoline is made up of hundreds of hydrocarbons that allow for its use as a fuel for mainly car engines and other internal-combustibles.

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When it comes to crude consumption, the U.S. uses more than the next four highest consumers combined. It is also important to note that our consumption is roughly twice that of our production, making our nation so dependent on foreign oil. New technologies such as electric-powered vehicles, for example, could substantially reduce demand for gasoline. However, after the invention of the automobile in 1892, gasoline became the main source of fuel for cars and light-duty vehicles. This makes gasoline one of the most important and well-known commodities in the world.

RBOB Gasoline: Understanding One of the Most Important Commodities in the World

Brent is described as light because of its relatively low density, and sweet because of its low sulfur content. Brent Crude is extracted from the North Sea and comprises Brent Blend, Forties Blend, Oseberg and Ekofisk crudes. Brent crude oil is used to price nearly 65% of all global crude oils. For example, since many of the refineries for gasoline are located in the U.S. Gulf Coast region, weather issues in that area can drive up the price for RBOB. Another important factor to consider is that gasoline is heavily taxed in many jurisdictions.

Methanol, derived from natural gas, and isobutylene from the butane obtained in the crude oil refining process, are reacted together to form MTBE. Refiners can add it directly into the blending stream as gasoline leaves the refinery. But MTBE, while not classified as a human carcinogen, is suspected to be a potential human carcinogen at high doses. MTBE gives water an unpleasant taste and can render large quantities of groundwater unfit for human consumption.

Securities products and services are offered through StoneX Securities Inc., a registered broker-dealer and member FINRA/SIPC. These materials have been created for a select group of individuals, and are intended to be presented with the proper context and guidance. Information contained herein was obtained from sources believed to be reliable, but is not guaranteed as to its accuracy. Unique to, data tables contain an option that allows you to see more data for the symbol without leaving the page. Click the “+” icon in the first column (on the left) to view more data for the selected symbol.

At this point, the gasoline that comes out of the refinery is not a finished product. In the technical language of the industry, it is a blending component, or a blendstock. Today, ethanol is used primarily as motor fuel and a fuel additive. The spread between sar trading Brent and WTI has been as high at $28 per barrel and as low as -$3.6 per barrel. When the spread is elevated there is an incentive for US refiners to purchase WTI over Brent. RBOB is an acronym for “Reformulated Gasoline Blendstock for Oxygen Blending”.

RBOB Gasoline Monthly Price – US Dollars per Gallon

This type of gasoline is used as the benchmark for gasoline trading on the Chicago Mercantile Exchange. The term “reformulated” describes gasoline that does not have any MTBE “Methyl tert-butyl ether”. Like any other commodity, natural gas is influenced by the forces of supply and demand.

The move is seen more as an acknowledgement of the growth of U.S. output and not as much a signal of concerns about global energy demand. Securities and Exchange Commission (SEC) as a Broker-Dealer and with the U.S. Commodity Futures Trading Commission (CFTC) as a Futures Commission Merchant and Commodity Trading Advisor.

Ethanol needs to be mixed into gasoline at the local terminal racks, just before it’s delivered. The ethanol and gasoline are splash blended as the tanker truck fills before making the final trip to the gasoline station. From this point on in the supply chain, the corrosive nature of ethanol is not a concern. The tanks and piping systems of most gasoline stations today are constructed out of fiberglass and corrosion-resistant plastics.

If ethanol is pushed through a pipeline, the water that it attracts will corrode the inside of the pipes. If it’s mixed with gasoline at the refinery, every pipe and tank that it passes through will be subjected to higher levels of corrosion. Since both producers of WTI and Brent compete for the same refiners as customers, the spread between the two oils is an important metrics for refiners. WTI is quoted on the Chicago Mercantile Exchange for pickup in Cushing Oklahoma. This area is landlocked and therefore requires shipment via pipeline or rail.

Distribution and Miscellaneous Costs

The refiner must remove light molecular weight, high RVP components, which changes the RFG’s distillation characteristics. This requires the removal of some heavy molecular weight and high boiling point components as well. There are two components to the profit margin that a refiner can achieve. The first is the difference between the price of crude oil and the price of gasoline. The second is the difference between the cost to generate gasoline and the price where gasoline can be sold is the profit margin.

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