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Gasoline and Gas Oil Futures as we head into the Summer.

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As we approach the summer season, the dynamics of gasoline and gasoil futures are becoming increasingly important. Despite geopolitical tensions in the Middle East, gasoline futures in the US are hovering near the  2.82 on April 16th. The lack of significant damage from recent military strikes and Tehran's downplaying of the situation have eased concerns of escalated warfare in the region, leading to expectations that oil trade will continue unimpeded. However, the situation remains fluid, with the potential for further conflict in the Middle East posing a risk to crude oil supplies. This, coupled with rising gasoline demand as we move into the summer months, could put upward pressure on prices. Data from the EIA shows that gasoline demand is edging higher, while stocks fell in the week ending April 12th. Despite this, supply remains ample as crude oil stocks rose significantly. The graph above shows the historical futures prices for RBOB Gasoline and NY Harbor ULSD for the past on...
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Bullish Momentum: Gasoline and Gas Oil Markets Surge.

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Gasoline and gas oil markets are in the midst of rapid change as inventories dwindle and geopolitical tensions escalate. In the week leading up to March 29, gasoline inventories dipped by 4.3 million barrels, despite robust production averaging 10 million barrels per day (bpd). However, a subtle dip of 0.5% in motor gasoline product supplied over the past four weeks compared to the same period last year hints at a nuanced demand-supply equilibrium. Geopolitical unrest further complicates the situation. Recent strikes on Russian territories by Ukrainian forces, coupled with Houthi militant attacks in the Red Sea, have disrupted crude deliveries, necessitating diversions around the Cape of Good Hope. British intelligence estimates suggest that these assaults have disrupted up to 10% of Russia's refining capacity, intensifying concerns over supply stability. In response to these dynamics, RBOB Gasoline prices surged by 10% to $2.7720 per gallon, while NY Harbor ULSD climbed by 7.6% to...
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Market Volatility Surges as OPEC+ Extends Output Cuts Amidst Geopolitical Tensions.

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 Russia oil refineries ablaze following bombing by Ukraine.  Photo credits: The Moscow time In a surprising turn of events, OPEC+ announced on March 2nd, 2024, that the voluntary output cuts of 2.2 million barrels per day would extend into the next quarter. This decision, contrary to market expectations, sent shock-waves through commodity markets. Initially, the market reacted unexpectedly, with April futures for RBOB gasoline and NY Harbor ULSD plummeting by 3.6% and 3.8%, respectively, in the week following the announcement. Speculators, it seemed, had their sights set elsewhere, reacting more strongly to reports of China's crude oil import contraction, which saw a significant drop of 5.7% in the first two months of the year. However, the tide swiftly turned as April futures prices for RBOB Gasoline and NY Harbor ULSD surged by 6.9% and 6.2% respectively week-on-week in the week ending March 15th, 2024. This dramatic reversal was fueled by US inflation data for February, rev...
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Uncertainties Surrounding Gas oil and Gasoline Futures ahead of OPEC+ Meeting.

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      The global oil market continues to experience dynamic shifts in supply and demand, mainly influenced by production agreements, inventory levels and trade policies. According to CME data, April's future contracts for RBOB Gasoline and NY Harbour ULSD  closed at $2.6109 per gallon and $2.6993 per gallon respectively.This represents a 4.2% and 2.1% increase respectively, week on week. The monthly volatility of April futures contracts for gasoline and gasoil stood at 14.7% and 5.5% respectively. This volatility is mainly pegged on speculator’s reaction to oil inventory levels, higher-for-longer interest rates, disruption of petroleum supply chains and speculations regarding voluntary production cuts by OPEC+.       Uncertainty surrounding ceasefire talks between Israel and Hamas, as well as ongoing Houthi attacks on Red Sea shipping also added a risk premium to oil prices, and disruptions on US refineries as well as Russia's export ban on gasoline. T...
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Unfolding the Volatility in Gasoline & Gas Oil Futures Prices.

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As depicted in the graph below, gasoline and gas oil futures prices have been on the rise since December 2023, with increases of 12% and 11% respectively. This can be attributed to geopolitical tensions, including the bombing of Russian petroleum refineries by Ukraine, the US's targeting of an Iraq militant commander, and attacks by Iran-affiliated groups in the Red Sea. These tensions have disrupted petroleum supply lines, driving prices up. Historical futures prices for gas oil and gasoline,Year-to-Date. Furthermore, the futures prices for March contracts for gasoline and gas oil, closely linked to crude oil prices, have been bolstered by a decrease in crude oil inventory levels. Data from the US Energy Information Administration shows a 3.44% drop in crude oil stock levels compared to last year. Additionally, in November 2023 OPEC+ agreed to voluntarily decrease oil production by 2.2 million barrels per day, further tightening supply amid rising demand. Despite optimistic econom...
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