Profile of Gasoline Futures on NYMEX Futures Exchange

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Gas Futures Contract Specs:

 

  • Ticker Symbol: RB
  • Exchange: NYMEX
  • Trading Hours: 9:00 AM until 2:30 PM EST and Globex hours.
  • Contract Size: 42,000 U.S. gallons (1,000 barrels)
  • Contract Months: all months(Jan. - Dec.)
  • Price Quote: U.S. dollars and cents per gallon. Ex $2.25 per gallon
  • Tick Size: $0.0001 (0.01¢) per gallon ($4.20 per contract).
  • Last Trading Day: close of business on the last business day of the month preceding the delivery month.

     

    RBOB Gasoline Futures - Fundamentals :

    The refineries usually gear up for gasoline production in the spring. Any refinery shutdowns or problems can cause prices for gasoline to move higher since the summer driving season requires large supplies of gasoline.

    Depending on the State, you can add about 65 cents(taxes) to the price of gas futures to get the retail price you pay at the pump. The retail price usually lags about a week.

    Hurricanes in the Gulf of Mexico can cause price spikes since most of the U.S refineries are located in that area.

    Gasoline futures will typically follow the price of crude oil futures.

    Reformulated Gasoline Blendstock for Oxygen Blending (RBOB) Futures is the successor futures contract for unleaded gas futures. The NYMEX has changed the grade of gasoline that trades at the exchange in 2006.

    RBOB is a wholesale non-oxygenated blendstock traded in the New York Harbor barge market that is ready for the addition of 10% ethanol at the truck rack.

    Gasoline is a by-product of crude oil. Approximately each three barrels of crude oil refined will yield two barrels of gasoline.

    Seasonally, gas futures normally reach their lowest price levels in December and their highest prices in April - May in preparation for the summer driving season which is the time of the year when demand peaks.

    RBOB Gas Futures Reports:

    The main report for RBOB Gasoline is the EIA Weekly Energy Inventory report.

    Tips on Trading Gas Futures:

    In June 2014, the price of RBOB gasoline futures was over the $3 per gallon wholesale level. As of February 8, 2016, the price had dropped to under $1.00 -- the lowest level since December 2008. The price of crude oil also fell sharply during this period. Both crude oil and gasoline prices have since recovered to around $50 per barrel and $1.70 per gallon as of April 2017.

    Gasoline is a petroleum product, raw crude oil processing occurs in a refinery. There are many other oil products processed from crude oil but gasoline is perhaps the most common of all. That is because there are so many cars around the world that depend on the fuel. While the price of gasoline has a high degree of correlation with the price of crude oil, it is also subject to changes in the gasoline crack spread. This processing spread reflects the economics of refining raw crude into gasoline.

    The price of gasoline dropped to one-third its price in 2016 because of a glut or oversupply of crude oil in the world. While lower gasoline prices mean that consumers pay less for fuel at the pump, lower oil prices had a negative impact on companies involved in all aspects of the oil business.

    Therefore, lower oil (and gasoline) prices had a negative effect on the stock market. The shares of many companies involved in the exploration for and production of crude oil moved lower in early 2016 as their profit margins declined. Additionally, companies that provide services to the petroleum industry and those who refine crude oil are highly sensitive to the price of the energy commodity.

    Gasoline is a product that anyone who drives a car is familiar with, which makes it one of the most important and widely used commodities on earth. Volatility in the price of oil and gasoline quickly translates to changes in the prices we pay at filling stations in the United States and around the world. Make sure to pay attention to seasonal differences when trading gasoline and watch the price of crude oil which is the input in the refining process that creates oil products, one of which is gasoline.