Thus, some of the global supply and demand factors for crude oil also apply to RBOB. From an investing perspective, RBOB gas is important because it’s the benchmark for gasoline futures. 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.
What Is RBOB Gasoline?
Since ethanol may increase the NOx, other additives and formulations are needed to meet higher air quality standards in California, which has a lower NOx limit. You can get access to best dividend stocks to invest in for 2021 trading them through most brokerage firms and futures trading portals. 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. Turmoil in important oil-producing countries can create spikes in gasoline prices.
To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IBKR to buy, sell best 5g stocks to buy in 2021 or hold such investments. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
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. This means that your single-malt 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.
When the spread is elevated there is an incentive for US refiners to purchase WTI over Brent. Information posted on IBKR Campus that is provided by third-parties does NOT constitute a recommendation that you should contract for the services of that third party. Tools to customize searches, view specific data sets, study detailed documentation, and access time-series data. State energy information, including overviews, rankings, data, and analyses.
Renewable & Alternative Fuels
The statistics for RBOB gasoline are not perfect due to the fact that production and consumption is measured by crude oil rather than gasoline itself. The figures below represent global consumption and production of crude oil, of which gasoline is derived. RBOB’s price is most sensitive to supply-and-demand changes for the commodity. 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. Drivers use more gas in the summer, which also affects the price because of the increase in demand.
Top Countries by Gasoline Production
- Individuals who own a business that is sensitive to gas prices—a trucking company, for example—can use RBOB gas futures as a hedge.
- 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.
- One of the earliest biotechnologies employed by man, the fermentation of sugar into ethanol, has been with us since prehistory.
- Now let’s look at the import volume for the CBOB for the rest of PADD 1 that does not require the reformulation.
Refining this essential fuel can be done in a variety of ways, with the most popular being forms of “cracking”. Cracking is a process whereby hydrocarbon molecules are broken up by heat and pressure into lighter molecules. There are various forms of this process, including thermal cracking (the most popular) and catalytic cracking. Other production/refining methods include polymerization, alkylation, and isomerization. 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.
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