Like any other commodity, natural gas is influenced by the forces of supply and demand. The most prolific uses of RBOB gasoline is as fuel for various products such as cars, lawn mowers, generators, pressure washers, and many other common household appliances. But it also has other applications such as removing paint or grease, and is even used in numerous pesticides and weed killers [see also Invest Like Jim Rogers With These Three Agriculture Stocks].
- From an investing perspective, RBOB gas is important because it’s the benchmark for gasoline futures.
- The growth of international participation in the contract has been very beneficial to the global trade in gasoline components such as RBOB and its European equivalent, Eurobob.
- End-of-Day prices are updated at 8pm CST each evening, and includes the previous session volume and open interest information.
- Liquids and gases are separated into components by weight and boiling point.
- The RBOB Gasoline futures contract is the global benchmark and the world’s most liquid gasoline futures contract because it is the only gasoline futures contract to trade electronically around the clock.
Like its twin brand Mobil, Exxon’s rewards program saves customers more per gallon if they buy premium fuel. Signing up for an Exxon Mobil Smart Card gas rewards credit card automatically offers savings of 6 cents per gallon, with no minimum purchase. The how to buy happy coin Citibank-issued card includes online account management as well as monthly itemization for tracking gas spending. RBOB is more expensive to refine—more energy and more effort are required to pull some of the additional hydrocarbons out of the fuel.
What is the RBOB / Brent Crack Spread?
These reports examine over 8.3 million ratings and reviews submitted in the GasBuddy fuel pricing and navigation app, as well as an analysis of 94 million consumer visits to stations. Its findings analyze criteria such as customer service, cleanness, lighting and even how their coffee stacks up. For the purposes of this list, we took the largest chains (most with 4,000-plus locations) with the best overall experience scores and ranked them accordingly.
While there are stringent rules regulating what goes into your fuel tank, those standards still don’t necessarily mean you’re being offered the best fuel. Top-Tier-rated gasoline contains a concentration of added detergents that are higher than the minimum amount specified by the EPA. This can result in a cleaner engine and overall improved performance, both in terms of output and fuel economy. This 2016 study from AAA (PDF) goes into detail about how Top-Tier detergent gasoline can make a real difference in quality without impacting your wallet to a significant degree. To that end, we’ve ruled out any company that hasn’t committed to using Top-Tier-rated gas universally (e.g. 7-Eleven).
Crude oil is composed of a number of different hydrocarbons, or long chains of molecules. Longer chains make heavier hydrocarbons, as well as higher boiling points. Traders venturing into the futures market for the first time need to consider the inherent risks… Energy Information Administration (EIA) shows that nearly eight million barrels was exported across the Atlantic in January 2023, which accounted for 50% of the total volumes arriving in the U.S.
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To reiterate, most of the gasoline produced by refineries is actually unfinished gasoline or gasoline blendstock. The Middle East used to have a stranglehold on the top ten producers worldwide, but the U.S. recently surpassed the region’s output. For the most part, this list contains both day trading charts emerging and frontier markets, which is what makes gas prices so volatile. Any kind of tension or trend in these foreign markets translate into spikes or dips in crude prices, which directly correlates to prices seen at the pump [see also Why Commodities Belong In Your Portfolio].
WHAT IS THE DIFFERENCE BETWEEN WHOLESALE FUTURES AND RETAIL GASOLINE PRICES?
It is common because it is considered better for the environment and is required in some areas. The list of symbols included on the page is updated every 10 minutes throughout the trading day. However, new stocks are not automatically added to or re-ranked on the page until the site performs its 10-minute update. CBOB is a blendstock that’s combined with ethanol to get E10 gasoline.
The depth of liquidity in the NYMEX RBOB futures and options markets shows that the centrality of RBOB futures to the global gasoline trade. Whilst the physical trade is centred around the port and storage infrastructure in New York Harbor, the sea of the futures and options as a pricing benchmark is far reaching. RBOB became the benchmark in the United States largely because of legislation banning gasoline with the chemical MTBE which was found in unleaded gas prior to legislation. MTBE was tied to the pollution of groundwater which threatened the health and safety of humans and wildlife.
Another very actively traded crude oil is WTI (West Texas Intermediate). This is another light sweet crude oil that is used in the refining process to create gasoline. WTI is the US benchmark and since the US is the largest consumer of gasoline world-wide, WTI is an actively traded crude oil benchmark. The most notable of best tech stocks to buy now these changes, as it relates to gasoline, is the simplification of the test methods for reformulated gasoline ‒ made by blending RBOB gasoline with ethanol. Previously, the “complex model” was used whereby the Volatile Organic Compound (VOC) performance standard was applied to measure emissions for reformulated gasoline.
Refining Costs and Profits
Some of the more European focused trading firms may look to trade the Eurobob non-oxy or E10 gasoline-based contracts and these are listed as futures contracts by CME Group. The contracts sit alongside the highly liquid RBOB futures and options contracts. The role of the refiner should not be underestimated as it allows crude products to be altered into a consumable good such as gasoline, diesel fuel or jet fuel. The refiner, just like the producer and consumer is incentivised by profits.
Still, if you consider both together, about 200,000 barrels of BOB are imported every day into the PADD 1 area.
Do you notice that there are no imports prior to the middle of 2004? 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. Other compounds, such as sulfur and benzene, still made it past the catalytic converter and into the air. Refiners have been adding MTBE to gasoline since 1979 to raise gasoline octane ratings and help prevent engine knocking. MTBE also displaces gasoline components such as aromatics— e.g., benzene and sulfur—optimizing the oxidation during combustion. For example, since many of the refineries for gasoline are located in the U.S.
NYMEX RBOB Gasoline: the global benchmark
The federal gasoline tax is 18 cents, while the average taxes and fees per state is 30 cents, though this varies (see GRAPHIC). As the primary fuel for most automobiles on the road, gasoline is an integral commodity to the lives of most consumers. Lawrence Pines is a Princeton University graduate with more than 25 years of experience as an equity and foreign exchange options trader for multinational banks and proprietary trading groups. 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.
An important factor to understand about gasoline is its octane rating. Internal combustion engines, like those found in automobiles, burn fuel in controlled processes. The higher the octane rating, the higher the compression rate, with a more efficient fuel capable of a higher output than those with a lower octane rating. This is the reason why some cars accept only certain kinds of fuel, and why there are price discrepancies among various gas options at the pump [see also Three Mining Companies With Robust Yields].
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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. RBOB is Reformulated Blendstock for Oxygenated Blending, a mix of petrochemicals intended to be mixed with ethanol to produce finished motor gasoline.
Reformulated Blendstock for Oxygenate Blending (RBOB) and his brother, Conventional Blendstock for Oxygenate Blending (CBOB) are the two base gasoline stocks that get mixed with ethanol at the terminal racks. One of the earliest biotechnologies employed by man, the fermentation of sugar into ethanol, has been with us since prehistory. The alcohol in wine, beer, and that fine single-malt scotch is the same ethanol that is blended into our gasoline.
There isn’t an easy way to invest directly in RBOB gas with stocks or bonds, but you can invest in energy sector stocks and bonds affected by the same economic forces. There are also options for energy-related ETFs focused on oil and natural gas. Whereas buying an RBOB future could cost thousands, shares of ETFs can cost less than $20. RBOB gas is a grade of gasoline commonly used in the United States.