Gasoline and Heating Oil
RBOB gasoline and ULSD heating oil futures track refined fuel prices. Learn the contracts, what drives them, seasonal patterns, crack spreads and who trades them.
Gasoline and diesel are the fuels most people actually buy. Their prices depend on crude oil, but also on refinery capacity, seasonal demand, fuel specifications and inventories. The main US futures are NYMEX RBOB gasoline and NYMEX ULSD (ultra low sulphur diesel, still often called heating oil). Together with crude oil, they form the crack spread that measures refining profits. Product markets can move very differently from crude when refineries break down or demand shifts.
The contracts#
| Contract | Symbol | Size | Quote | Tick value |
|---|---|---|---|---|
| RBOB gasoline | RB | 42,000 gallons (1,000 barrels) | Dollars per gallon | $0.0001 per gallon = $4.20 |
| NY Harbor ULSD (heating oil) | HO | 42,000 gallons (1,000 barrels) | Dollars per gallon | $0.0001 per gallon = $4.20 |
| ICE low sulphur gasoil | G | 100 metric tonnes | Dollars per tonne | Europe's diesel benchmark |
RBOB stands for Reformulated Blendstock for Oxygenate Blending: gasoline before ethanol is added at the terminal. Both NYMEX contracts are delivered in New York Harbor.
Converting product prices#
price per barrel = price per gallon × 42RBOB at $2.50 a gallon equals $105 a barrel, which can then be compared with crude. See Crack Spreads.
What drives product prices#
| Driver | Effect |
|---|---|
| Crude oil prices | The main input cost |
| Refinery utilisation and outages | Outages tighten product supply, widening cracks |
| Seasonal demand | Gasoline in summer; diesel and heating oil in winter |
| Fuel specifications | Summer gasoline is more costly to produce |
| Inventories | Weekly EIA data on gasoline and distillate stocks |
| Exports | US product exports to Latin America and elsewhere |
| Freight and trucking activity | Diesel demand follows industrial and freight activity |
Seasonal patterns#
- Gasoline: prices often rise into spring as refiners switch to summer grade fuel and before the US driving season (Memorial Day to Labor Day). They often ease in autumn when winter grade fuel returns.
- Heating oil and diesel: demand rises in winter, especially in the US Northeast; diesel also follows freight and agricultural demand.
See Seasonality in Commodities.
Diesel in 2022#
After Russia's invasion of Ukraine, disruptions to Russian diesel exports, low inventories and strong demand pushed diesel cracks to record levels. New York Harbor ULSD futures briefly exceeded $5 a gallon, and diesel prices stayed elevated relative to crude for months. See Energy Markets.
Who trades product futures#
- Refiners: hedge margins by selling products and buying crude.
- Airlines, trucking and shipping companies: hedge fuel costs (jet fuel is often hedged with heating oil futures).
- Fuel distributors and retailers.
- Speculators trading seasonality, cracks and inventories.
Inventory data#
The EIA Weekly Petroleum Status Report shows gasoline and distillate inventories and refinery utilisation. Product markets react to stock changes, especially before peak seasons. See Storage and Inventories.
Risks#
- Large, sudden moves on refinery outages and weather.
- Seasonal grade changes affecting contract spreads.
- Delivery and expiry for physically delivered contracts. See Physical Delivery vs Cash Settlement.
- Basis risk between New York Harbor prices and local fuel prices.
Frequently asked questions#
What is RBOB gasoline?#
The NYMEX gasoline futures benchmark, reformulated gasoline blendstock before ethanol blending, delivered in New York Harbor.
Is heating oil the same as diesel?#
The NYMEX heating oil contract now specifies ultra low sulphur diesel, so heating oil futures effectively track diesel prices.
Why do gasoline prices rise in spring?#
Refiners switch to more expensive summer blends and build inventories before the summer driving season, which often lifts prices.
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