Crude Oil vs. NY Harbor RBOB Gasoline Futures

Crude Oil vs. RBOB Futures

These are weekly prices from the EIA. The crude oil price is divided by 42 gallons per barrel.

Between September 2007 and April 2008, the average difference between The price of wholesale gasoline and crude oil was $0.15 per gallon. Extrapolating this gives a price of crude oil at abouit $135 per barrel for wholesale gasoline to reach $3.40 per gallon. At this price the average national retail price of gasoline should be at least $4.

This is done using the very close $0.15 difference and low refinery margins of the last 6 months. From the graph, it can be seen that differences of 60 and 70 cents are not atypical. Therefore retail prices could easily approach $4 at present levels of $100-$120 per barrel of crude.

At the time of this writing, NY RBOB is $3.05, Crude is $119, and The retail average for regular unleaded is $3.60.

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3 Responses to Crude Oil vs. NY Harbor RBOB Gasoline Futures

  1. Uncle Yarra says:

    Do you think that the volumes of imported gasoline put downward pressure on refinery margins for gasoline?
    Also, do you place any merit on the robert rapier thing of comparing crude oil inventories, gasoline stocks and refinery utilisation?
    (I think the movements of unfinished oils muddies the waters a bit there, so I can’t say I have a considered opinion on the matter).

  2. JR says:

    Do you think that the volumes of imported gasoline put downward pressure on refinery margins for gasoline?

    I would like to be able to answer this question. I’m going to pass, I just haven’t looked at the numbers closely enough… I’ll guess Yes, since it simply creates more competition among refineries on a global scale.

    Also, do you place any merit on the robert rapier thing of comparing crude oil inventories, gasoline stocks and refinery utilisation?

    I respect Robert Rapier’s analysis on the gasoline and ethanol industries. My own feelings on this are formed more by my own knowledge of the supply chain and something Matt Simmons wrote recently concerning inventory numbers which I wil reprint soon. Basically he says the numbers are all rough estimates which use small samples as a proxy fot the whole country. So the traders make big moves on released numbers that may be nothing more than fiction.

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