RBOB Gasoline Futures Are Down More Than A Dime For The Week So Far

ULSD futures are trading at their lowest levels in a year after technical support broke down for refined products Monday and sellers made good on their threat to push prices sharply lower. RBOB gasoline futures are down more than a dime for the week so far, with summer-grade products now pricing at levels we haven’t seen since winter-grade specs were being priced in February.

Worst of the worst: Chicago diesel prices continue to be the cheapest in the US by more than a dime, and are valued around $2.04 this morning, the lowest level since late 2021. While that’s the only region that’s seeing diesel prices broken down below pre-Ukraine-invasion levels, both the NYH and Group 3 spot markets are less than a nickel away from reaching fresh 2.5 year lows of their own.

On the gasoline side of the barrel, Gulf Coast, Group 3 and Chicago conventional grades are all within a dime of the $2 mark this morning, suggesting that those regions could see retail prices drop to around $2.60 in the coming weeks if futures don’t rebound. Reformulated grades are trading 10-20 cents higher but are still low enough to drag retail prices below $3 across large parts of the US barring a fast rebound in values.

While oil prices are joining in on the sell-off, they’re not keeping pace, which is pushing crack spreads to their lowest levels of the year, and not far from where we saw values last winter when multiple US refiners were forced to cut runs for economic reasons.

Adding to the bearish sentiment on refined products this week are reports that the Dangote refinery exported its first cargo of on spec Jet Fuel to Europe this week, and Chinese refiners are beginning to buy Canadian crude oil from the newly started Transmountain system, which should give them both grade and price flexibility to optimize run rates for the country’s rapidly expanding refineries.

A win for the EPA and refiners? A recent study highlights the 50% reduction in cancer-causing Benzene emissions at refineries in the US. An interactive map on the website of the study’s publisher shows all US refineries and highlights those exceeding the Benzene “Action levels”.

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