What is RBOB Gasoline? A CommodityHQ com Guide

MTBE was tied to the pollution of groundwater which threatened the health and safety of humans and wildlife. Since the legislation was introduced in the United States, RBOB futures has even become the new benchmark gasoline futures contract. The balance between global supply and demand for oil affects prices. Recently, non-OECD (Organisation for Economic Cooperation and Development) countries have been consuming more oil due to economic development.

Commodities and Trade Tariffs

• Brent crude oil is used to price nearly 65% of all global crude oils.
• The refiner, just like the producer and consumer is incentivised by profits.
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• This means that your single-malt scotch mixes well with club soda.
• At this point, the gasoline that comes out of the refinery is not a finished product.
• It is also proven to reduce smog and pollutants in the ground-level ozone layer.

Listed contracts conduct trading throughout the next 36 consecutive months. As mentioned above, gasoline is a natural by-product of crude oil. For every three barrels of crude oil refined, approximately two barrels of gasoline can be salvaged. Refining this essential fuel can be done in a variety of ways, with the most popular being forms of “cracking”.

Enter Stage Left – Ethanol

For example, since many of the refineries for gasoline are located in the U.S. Gulf Coast region, weather issues in that area can drive up the price for RBOB. Another important factor to consider is that gasoline is heavily taxed in many jurisdictions. The costs of operating refineries and the productivity of those refineries can have a major effect on gasoline prices. Oil refiners look at crack spreads when making production decisions. RBOB stands for Reformulated Gasoline Blendstock for Oxygen Blending, and is a gasoline blend that has been reformulated to reduce smog-forming emissions.

Cleaning up the air – When the Cure can Kill

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. RBOB gasoline futures are traded at the NYMEX under ticker symbol RB. Contract size is 42,000 gallons (1,000 barrels) quoted in US Dollars and Cents per gallon. RBOB abshire smith broker review is more expensive to refine—more energy and more effort are required to pull some of the additional hydrocarbons out of the fuel.

CBOB stands for Conventional Gasoline Blendstock for Oxygen Blending, and is a blend of conventional gasoline not specifically formulated to reduce emissions. The main difference between RBOB and CBOB is that RBOB has been reformulated to reduce emissions and CBOB has not. RBOB gasoline is generally used as vehicle fuel, generator fuel and pressure washers. The United States is the largest consumer of gasoline globally, so demand in the country is a huge factor in RBOB gasoline trading momentum. This gas futures tends to fall in the winter months of November to January and rise during April and May, when US consumers go on road trips for their summer vacations.

Ethanol needs to be mixed into gasoline at the local terminal racks, just before it’s delivered. The ethanol and gasoline are splash blended as the tanker truck fills before making the final trip to the gasoline station. From this point on in the supply chain, the corrosive nature of ethanol is not a concern. The tanks and piping systems of most gasoline stations today are constructed out of fiberglass and corrosion-resistant plastics.

What is RBOB (Reformulated Blendstock for Oxygenate Blending)?

This fuel is specifically designed for cars that are equipped to use oxygenated fuel, with the addition of an oxygenated component. This component Linux for Network Engineers helps the fuel to burn cleaner and more efficiently, reducing emissions and improving fuel economy. 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. You can use the CME Group website or the Nasdaq website to find the current price of a gallon of RBOB gas.

What is RBOB?

This generally occurs during a recession or Brent oil is artificially buoyed by supply disruptions. The term crack spread describes the difference between the trading 212 cfd broker review value of gasoline and crude oil. This activity is known as the downstream process of oil and gas companies.

How Do You Find the Price of RBOB Gasoline?

From a chemical standpoint, this low-density fuel is very volatile due to its natural makeup and the numerous additives that can be mixed in, some of which include lead, ethanol, and dye. The chart above shows the weekly average import volume, in thousands of barrels, of RBOB (with special blending components for blending with ethanol) into the PADD 1—Northeast area. Do you notice that there are no imports prior to the middle of 2004? The cold air allowed engines to run cooler, creating more unburned hydrocarbons. This, combined with the way cold air tends to trap warmer exhaust, created hazier and smoggier days.

• The crack spread could also be a signal of future market conditions.
• This type of gasoline is used as the benchmark for gasoline trading on the Chicago Mercantile Exchange.
• Industry watchers measure refiners by their capacity, which is the amount of crude oil that can go into distillation units.
• Recently, non-OECD (Organisation for Economic Cooperation and Development) countries have been consuming more oil due to economic development.
• This gas futures tends to fall in the winter months of November to January and rise during April and May, when US consumers go on road trips for their summer vacations.
• The acronym RBOB stands for Reformulated Blendstock for Oxygenate Blending (RBOB), which is a key component in creating reformulated gasoline.

Gasoline represents nearly half of the petroleum products produced, which ranks it as the number one product recovered during the refining process. Excludes conventional gasoline blendstocks for oxygenate blending (CBOB). RBOB Gasoline futures are traded on the Chicago Mercantile Exchange, with prices quoted in U.S. dollars and cents per gallon under the symbol RB. A single contract represents 42,000 gallons with a minimum fluctuation of $0.0001 per gallon.