Reformulated Blendstock for Oxygenate Blending Wikipedia

In 2011, Mr. Pines started his own consulting firm through which he advises law firms and investment professionals on issues related to trading, and derivatives. Lawrence has served as an expert witness in a number of high profile trials in US Federal and international courts. Increasing demand for gasoline in Asia, Latin America and the Middle East often outpaces supply from those regions.

• The map above illustrates a color-coded patchwork of different blends of reformulated gasoline, each one a specific cocktail for the climate.
• In the lead-up to summer, prices tend to rise in anticipation of peak driving season.
• Whereas buying an RBOB future could cost thousands, shares of ETFs can cost less than $20.
• Since the legislation was introduced in the United States, RBOB futures has even become the new benchmark gasoline futures contract.
• RBOB gasoline futures are listed on the Chicago Mercantile Exchange (CME) under the futures symbol RB.

California is the largest gasoline-consuming state with over 15 billion gallons consumed every year. In the lead-up to summer, prices tend to rise in anticipation of peak driving season. Prices tend to fall in what is a white-label broker in forex the winter when inclement weather keeps consumers off the roads. 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. In this guide to understanding RBOB gasoline as a commodity, we’ll explain why it’s valuable, how and where it’s made, which countries produce the most gasoline, and explain what drives its price.

RBOB Gasoline Supply and Demand

This means most investors want to liquidate positions prior to the expiration of the contracts. If a position is not liquidated, the holder of a long contract might be responsible for taking delivery of 42,000 gallons of gasoline. It is safe to say that most investors do not want to take physical delivery of that much gas. Thus, investors must be aware of the different deadlines for futures contracts and offset any positions before the risk of delivery comes into play. The RBOB / Brent crack spread describes the difference between the price of RBOB gasoline and the price of Brent crude oil.

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Otherwise, demand in the winter tends to be roughly 40 million gallons per day lower in the winter compared to the summer. Mergers and acquisitions rumors Much of the U.S. gasoline supply comes from refineries in the Gulf Coast region. As a result, weather events or supply congestion in that area can cause short-term delays or price spikes.

Gasoline is a vital part of our everyday lives, and there is a strict need to consume no matter what economic conditions may be, making it an attractive investment during all kinds of markets. Prices for RBOB gasoline futures logically have a high degree of correlation with crude oil since gasoline is distilled from crude. Thus, some of the global supply and demand factors for crude oil also apply to RBOB. 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.

What It Means for Individual Investors

This means that storage tanks, delivery trucks, and refining plants present the most dangerous threats of the chemical being released into the environment. Aside from its health hazards, gasoline has also long been under the gun for contributing to greenhouse gases and global climate change. An important factor to understand about gasoline is its octane rating.

Seasonality (Driving Season And Weather)

• The elimination of lead in gasoline and the introduction of catalytic converters in the mid-80s was only the first step in cleaning up the air.
• Otherwise, demand in the winter tends to be roughly 40 million gallons per day lower in the winter compared to the summer.
• The US consumed 8.7 million barrels of gasoline per day in 2021, equivalent to nearly 370 million gallons per day.
• Gasoline is a vital part of our everyday lives, and there is a strict need to consume no matter what economic conditions may be, making it an attractive investment during all kinds of markets.
• Gasoline represents nearly half of the petroleum products produced, which ranks it as the number one product recovered during the refining process.

Here are four important facts for anyone trying to trade the gasoline futures market. This also means that fuel ethanol attracts water, making it corrosive to the steel used in pipelines and  plumbing at oil refineries. 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. Crude oil varieties and the technology available for refining them can lead to different gasoline products and pricing from one refinery to the next. Crack spreads are a way to measure the margins for refining crude products and can serve to predict how tight the supply of products is in different markets.

What Are Gasoline CFDs?

Brent crude oil is one of several types of light sweet crude oil that serves as the global benchmark for crude oil. 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. sql developer dba careers RBOB is an acronym for “Reformulated Gasoline Blendstock for Oxygen Blending”.

These funds tend to have relatively stable share prices, and higher than average yields. An ongoing trade battle between the United States and China has magnified the impact of tariffs… Before I forget, there is the blending-stock cousin, CARBOB, a special RBOB formula mandated by the state of California. Each of these products is recovered at different temperature points.