Low Volatility ETFs invest in securities with low volatility characteristics. These funds tend to have relatively stable share prices, and higher than average yields. An ongoing trade battle between the United States and China has magnified the impact of tariffs… Gasoline is one of the most widely known and used commodities in the world, primarily utilized for fuels. But its application extends beyond that industry to such uses as paint solvents, among others.
Of America’s largest nationwide chains, Chevron scores the highest points in overall customer satisfaction. Its reach spans over 7,800 stores, and while some gas stations offer convenient food marts, one location in North Hollywood goes above and beyond gasoline. It’s the home of Cilantro Mexican Grill, one of the highest-rated burrito spots in California’s San Fernando Valley. You’re likely avoiding being out in public during the pandemic as much as possible, and that’s smart. But there will undoubtedly be times where you have to drive to get essentials, and that might also mean you need to refuel your ride.
- While there are stringent rules regulating what goes into your fuel tank, those standards still don’t necessarily mean you’re being offered the best fuel.
- 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.
- Top-Tier-rated gasoline contains a concentration of added detergents that are higher than the minimum amount specified by the EPA.
- Crude oil and gasoline prices on Thursday gave up an early advance and sold off, with crude falling to a 1-week low and gasoline falling to a 2-week low.
- That means you need to multiply the quoted price by 42,000 to know what the contract cost will be.
Brent crude oil is used to price nearly 65% of all global crude oils. RBOB is more expensive to refine—more energy and more effort are required to pull some of the additional hydrocarbons out of the fuel. Producing reformulated gasoline using ethanol presents problems for refiners. Ethanol affects nitrogen oxides (NOx) and toxic emissions as well as Volatile Organic Compounds (VOCs). For RFG (Reformulated Gasoline) to meet VOC requirements, the finished blend must have a low Reed Vapor Pressure (RVP), generally less than 7.0 psi during the summer.
Holders of Sinclair’s Green Card gas rewards card don’t currently benefit from instant savings at the pump, but the card does act as a multipurpose, no-interest account sans any bank hassle. It, like other cards, can be paired with the Dinopay app, a helpful tool that makes transactions safe and easy. You’ll find Marathon’s 5,600 branded fuel stations throughout the Midwest, South and Northeast.
Physical Properties of RBOB Gasoline
The higher the octane rating, the higher the compression rate, with a more efficient fuel capable of a higher output than those with a lower octane rating. RBOB is a “BOB” (before oxygenate blending) because it is formulated for subsequent blending with 10% ethanol to form the final gasoline blend that is marketed to end users. The map above illustrates a color-coded patchwork of different blends of reformulated gasoline, each one a specific cocktail for the climate. This map predates the complete phase-out of MTBE, but it still accurately depicts the wide variety of reformulation required at the local level. 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.
As a result, weather events or supply congestion in that area can cause short-term delays or price spikes. RBOB is Reformulated Blendstock for Oxygenated Blending, a mix of petrochemicals intended to be mixed with ethanol to produce finished motor gasoline. Spot the iconic orange ball of a 76 gas station, and you’re in good hands. With the third-best customer service ranking on our list, the station only operates 1,800 stores, but it’s worth making it your-go to if one is nearby. BP recently shuttered its old awards program and instituted BPme, an app-based gas rewards program that allows members to save 5 cents per gallon at any of its 7,200 locations.
The price for the RBOB gasoline futures contract is quoted in U.S. dollars and cents. The minimum price tick for RBOB is 0.0001, equivalent to a movement of $4.20 for one contract. Prices for RBOB gasoline futures logically have a high degree of correlation with crude oil since gasoline is distilled from crude. Thus, some of the global supply and demand factors for crude oil also apply to RBOB.
Futures Overview
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. Though the brand has a low ranking, 58 million drivers still fuel up their cars, trucks and SUVs on a monthly basis at one of its locations. The Exxon Mobil Smart Card gas credit card will save you 6 cents per gallon at these locations just as it does at any Mobil, along with a handful of other bonus rewards benefits.
T. Boone Pickens, Founder of Mesa Petroleum
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.
Why is RBOB gas important?
This type of gasoline is used as the benchmark for gasoline trading on the Chicago Mercantile Exchange. The term “reformulated” describes gasoline that does not have any MTBE “Methyl tert-butyl ether”. Ethanol needs to be mixed into gasoline at the local terminal racks, just before it’s delivered.
Lawrence Pines is a Princeton University graduate with more than 25 years of experience as an equity and foreign exchange options trader for multinational banks and proprietary trading groups. Mr. Pines has traded on the NYSE, CBOE and Pacific Stock Exchange. In 2011, Mr. Pines started his own consulting firm through which he advises law firms and investment professionals https://traderoom.info/ on issues related to trading, and derivatives. Lawrence has served as an expert witness in a number of high profile trials in US Federal and international courts. 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.
That means you only need 12% of the total investment down to buy the contract on margin. RBOB gas is a grade of gasoline commonly used in the United States. It is common because it is considered better for the environment and is required in some areas.
The weekly chart of the RBOB Brent crack spread shows that at times the crack was as high as $28 dollars per barrel and as low as -$5.5 per barrel. When the crack spread is negative there is no incentive for refiners to purchase and refine Brent oil. This generally occurs what is the purpose of coding clinic during a recession or Brent oil is artificially buoyed by supply disruptions. When the crack spread is elevated and the price is well above the cost for refiners to convert Brent into RBOB, there is a large incentive to purchase and refine as much crude oil as possible.