# 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.

Source: https://learn.tradelabsai.com/commodities/gasoline-and-heating-oil/  
Track: Commodities · Level: Intermediate · Updated: 2026-10-03  
Publisher: TradeLabs AI (https://tradelabsai.com). Education, not financial advice.  
Cite as: TradeLabs Learn, "Gasoline and Heating Oil", https://learn.tradelabsai.com/commodities/gasoline-and-heating-oil/

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 × 42
```

RBOB at $2.50 a gallon equals $105 a barrel, which can then be compared with crude. See [Crack Spreads](https://learn.tradelabsai.com/futures/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](https://learn.tradelabsai.com/commodities/seasonality-in-commodities/).

**Example: A hurricane and gasoline cracks**
A major hurricane approaches the US Gulf Coast, home to a large share of US refining capacity. Several refineries shut down. Crude oil prices fall slightly because refineries will buy less crude, while RBOB gasoline jumps 8% because product supply is disrupted. The gasoline crack spread widens sharply. A trader long the gasoline crack (long RBOB, short crude) profits from both moves. Similar episodes followed Hurricanes Katrina and Rita in 2005 and Harvey in 2017.

## 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](https://learn.tradelabsai.com/commodities/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](https://learn.tradelabsai.com/commodities/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](https://learn.tradelabsai.com/futures/physical-delivery/).
- **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.

Next, move from energy to metals in [Metals Markets](https://learn.tradelabsai.com/commodities/metals-markets/).

## Continue learning

- Next lesson: [Metals Markets](https://learn.tradelabsai.com/commodities/metals-markets/)
- Previous lesson: [Natural Gas](https://learn.tradelabsai.com/commodities/natural-gas/)
- Related: [Natural Gas](https://learn.tradelabsai.com/commodities/natural-gas/): Natural gas prices are driven by weather, storage, production and LNG exports. Learn Henry Hub futures, the storage report, seasonality and why gas is so volatile.
- Related: [Crack Spreads](https://learn.tradelabsai.com/futures/crack-spreads/): The crack spread measures the margin between crude oil and refined products like gasoline and diesel. Learn the 3:2:1 spread, how to calculate it and who trades it.
- Related: [Crude Oil](https://learn.tradelabsai.com/commodities/crude-oil/): Crude oil is the world's most traded commodity. Learn WTI vs Brent, the futures contracts, OPEC+, shale, inventory reports and how traders approach oil.
- Related: [Energy Markets](https://learn.tradelabsai.com/commodities/energy-markets/): Energy markets cover crude oil, natural gas, refined products and power. Learn the benchmarks, how they connect, what drives prices and how energy is traded.
- Related: [Seasonality in Commodities](https://learn.tradelabsai.com/commodities/seasonality-in-commodities/): Many commodities follow seasonal patterns tied to weather, harvests and demand. Learn key patterns in grains, energy and softs, how to measure them and their limits.
- Related: [Storage and Inventories](https://learn.tradelabsai.com/commodities/storage-and-inventories/): Inventories are the buffer between commodity supply and demand. Learn the theory of storage, how stocks affect prices and curves, and the key inventory reports.