RBOB Gasoline (RB)

The fuel that powers American transportation. RBOB gasoline futures track the wholesale cost of unleaded gasoline.

2-Minute Beginner Summary

RBOB (Reformulated Blendstock for Oxygenate Blending) is the gasoline grade traded on futures markets. It directly affects what you pay at the pump. Prices rise before summer driving season and when refinery problems cut supply. Crude oil is the main cost, but refining margins, taxes, and transportation add to pump prices.

What Is RBOB Gasoline?

RBOB is a gasoline blendstock that becomes finished gasoline when mixed with ethanol. It's the primary gasoline futures contract and reflects wholesale pre-tax prices.

Why RB Matters

Gasoline is the largest petroleum product by consumption in the U.S. Pump prices directly impact consumer spending and are politically sensitive.

What Moves the Price?

Top 6 drivers affecting RBOB Gasoline prices:

Crude Oil Prices

Crude is ~50-60% of gasoline cost. WTI and Brent movements directly impact gasoline.

Refinery Utilization

Refinery outages (planned or unplanned) tighten gasoline supply and spike prices.

Driving Season Demand

Memorial Day to Labor Day is peak driving season. Demand rises, prices often follow.

Inventory Levels

EIA weekly reports on gasoline stocks move prices. Low stocks = bullish.

RVP Regulations

Summer gasoline requires lower volatility, more expensive to produce. Seasonal price premium.

Ethanol Costs

Ethanol (10% of finished gas) costs affect final price. Corn prices matter.

Market Structure

Spot vs Futures

RBOB trades as futures on NYMEX. Physical gasoline prices vary by region based on transportation costs and local taxes.

Contango & Backwardation

Gasoline often trades in backwardation during summer (spot > futures) due to immediate demand. Winter months can show contango.

Key Exchanges: NYMEX (CME Group)

Contract Size: 42,000 gallons (1,000 barrels) per contract

Seasonality

Gasoline has the strongest seasonality of refined products.

Peak Months: May, June, July, August

Low Months: November, December, January, February

Prices typically bottom in winter, rise through spring, peak around Memorial Day, and decline after Labor Day. Hurricane season (Aug-Oct) can cause refinery-related spikes.

Macro Sensitivity

Gasoline demand tracks consumer activity and economic health. Strong economies = more driving. High gas prices contribute to inflation and can slow growth.

USD Sensitivity: negative
Inflation Sensitivity: positive
Growth Sensitivity: positive
Rates Sensitivity: negative

Stock & ETF Exposure Map

Related Stocks

Related ETFs

Key Calendar & Reports

EIA Weekly Petroleum Report (Weekly (Wednesday))

Source: EIA. Gasoline inventories, production, and demand

AAA Gas Price Updates (Daily)

Source: AAA. National average retail gasoline prices

Refinery Turnaround Season (Seasonal (Spring/Fall))

Source: Various. Planned maintenance periods that affect supply

How to Trade RBOB Gasoline

Trade via futures on NYMEX or gain exposure through refiner stocks like VLO and MPC. Gasoline ETFs exist but have high roll costs.

Frequently Asked Questions

Why are gas prices different in each state?

State taxes, transportation costs, and environmental regulations vary. California has the strictest rules and often the highest prices.

What is the crack spread?

The difference between crude oil cost and refined product prices. A wide crack spread means refineries are profitable.

Why do gas prices rise before holidays?

Anticipation of increased driving demand, plus refineries may reduce output for maintenance before peak season.

How do hurricanes affect gas prices?

Gulf Coast refining capacity can be shut down during hurricanes, reducing supply and spiking prices nationwide.

What is summer blend gasoline?

Gasoline with lower Reid Vapor Pressure (RVP) to reduce evaporative emissions. It's more expensive to produce than winter blend.

How much of gas price is taxes?

Federal tax is 18.4 cents/gallon. State taxes range from 14 cents (Alaska) to 68 cents (California). Total tax is typically 15-25% of pump price.

Do gas prices affect inflation?

Yes, significantly. Gasoline is in the CPI basket and affects transportation costs for all goods. It's one of the most visible price signals to consumers.

Will EVs kill gasoline demand?

EV adoption is growing but gasoline demand is expected to decline slowly through 2030s. Legacy vehicle fleet will maintain demand for years.

Glossary

RBOB: Reformulated Blendstock for Oxygenate Blending - gasoline before ethanol is added.
Crack Spread: The profit margin from refining crude oil into gasoline and other products.
RVP: Reid Vapor Pressure - a measure of gasoline volatility regulated by season.
Octane: A measure of fuel's resistance to engine knock. Higher octane = premium grades.
Ethanol: Corn-based alcohol blended into gasoline (usually 10%).
Turnaround: Scheduled refinery maintenance that temporarily reduces production.
PADD: Petroleum Administration for Defense Districts - 5 U.S. regions for fuel tracking.
Jobber: Wholesale fuel distributors who buy from refineries and sell to gas stations.
Rack Price: Wholesale price at the loading terminal where trucks pick up fuel.
Branded vs. Unbranded: Gasoline sold under major oil company names vs. independent stations.