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RBOB is a distillation of hydrocarbons from crude oil that is used to produce gasoline fuel. After it is distilled from petroleum, RBOB is blended with ethanol to produce reformulated gasoline. Refineries heat crude oil at temperatures python math libraries 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. The All Futures page lists all open contracts for the commodity you’ve selected.
Environmental regulations in the United States, for example, require gasoline sold in the summer to be less susceptible to evaporation. Gasoline is also used as a fuel in equipment for construction, farming, forestry and landscaping. Electricity generators and emergency power supplies also use gasoline.
- For example, hurricane weather in the Gulf of Mexico can have a big impact on RBOB’s price because it affects the supply produced by the many U.S. refineries in the gulf.
- Lawrence has served as an expert witness in a number of high profile trials in US Federal and international courts.
- It is also important to note that our consumption is roughly twice that of our production, making our nation so dependent on foreign oil.
- As a result, although gasoline margins have been low recently, refiners cannot completely stop making gasoline in favor of other petroleum products, such as distillate.
Supply Fuels Gasoline Prices
Seasonal pollution requirements for gasoline can also lead to disparities in pricing as can weather-related disruptions to refinery operations. Edwin Drake, the first American to drill for oil, discovered gasoline by accident when he was distilling oil to limefx make kerosene for heating. Drake considered gasoline a useless byproduct of the distillation process and discarded it. View the latest top stories from our trusted partners, with a focus on today’s futures and commodity markets.
This requires refiners to substitute more expensive components into gasoline. California is the largest gasoline-consuming state with over 15 billion gallons consumed every year. 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. Forms EIA uses to collect energy data including descriptions, links to survey instructions, and additional information.
If the price of gas rises past $2.30, you can sell your futures at a profit. If the price of gas drops below $2.30, you would sell the futures at a loss but save money at the pump. Fluctuations in global demand and how refineries respond to changes in demand can materially affect gasoline prices. Gasoline derives from refining crude oil, so the price of crude oil has a big impact on its price. This means that your single-malt the best strategies for gold trading 2019 scotch mixes well with club soda. This also means that fuel ethanol attracts water, making it corrosive to the steel used in pipelines and plumbing at oil refineries.
RBOB Gasoline Price LIVE CHART
Increasing demand for gasoline in Asia, Latin America and the Middle East often outpaces supply from those regions. Demand for gasoline has been steadily declining in Europe and the United States. Oil refiners look at crack spreads when making production decisions.
EIA Survey Forms
RBOB gasoline often goes by the names gasoline, petro gasoline or petrol. 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.
Additionally, RBOB gas prices move before the price at the pump moves. So this may give you some insight into what retail gas prices will be in a few days. Individuals who own a business that is sensitive to gas prices—a trucking company, for example—can use RBOB gas futures as a hedge. If you expect a future increase in gas prices, you can buy an RBOB futures contract, say, at $2.30 a gallon.
Traders venturing into the futures market for the first time need to consider the inherent risks… 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. Say you want to buy an RBOB contract when the price is around $2.30 per gallon. That means you only need 12% of the total investment down to buy the contract on margin.
Factors Affecting Natural Gas Prices
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 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. Due to gasoline’s widespread use, it has come under fire for numerous health and environmental concerns over the last few decades. From a health standpoint, the fuel stores numerous carcinogenic chemicals, and can be a danger to the general public if a leak were ever to occur.