Sign in Subscribe
Petroleum

Gasoline Contracts Plummet on Low Demand and Weak Technical Indicators

Strategic Insights

— 2 min read

Gasoline contracts on the New York Mercantile Exchange (Nymex) took a sharp decline on Friday, driven by low demand and weak technical indicators. The April gasoline contract settled at 52.47 cents per gallon, down 1.88 cents, while the May contract dropped to 52.85 cents per gallon, down 1.48 cents. The slump in gasoline was mirrored in crude contracts, with the April contract falling to $17.91 per barrel, down 11 cents. Analysts noted that the expiration of the April crude options contract contributed to the decline, but the overall impact was small.

Key Takeaways:

  • The April gasoline contract settled at 52.47 cents per gallon, down 1.88 cents.
  • The May gasoline contract was down 1.48 cents at 52.85 cents per gallon.
  • The Wisconsin Senate approved a bill banning two additives of reformulated gasoline (RFG) in the state.
  • The bill would prohibit the sale of RFG containing more than 2% methyl tertiary butyl ether (MTBE) or ethyl tertiary butyl ether (ETBE) year-round.
  • Spot market prices for MTBE dropped significantly to around 70 cents per gallon in the past two weeks.
  • The slump in gasoline was matched by a fall in crude, with the April contract dropping 11 cents to settle at $17.91 per barrel.
  • Extremely low refining margins were reported due to bearish prices for crude and products.
  • Heating oil on Nymex rebounded from Thursday's losses, with the April contract settling up 0.11 cents at 45.25 cents per gallon.
  • Natural gas prices on the spot market softened on forecasts of milder weather, but Nymex contracts strengthened, with the April contract rising 2.1 cents to $1.463 per MMBtu.

Statistics:

  • April gasoline contract: 52.47 cents per gallon (down 1.88 cents)
  • May gasoline contract: 52.85 cents per gallon (down 1.48 cents)
  • Spot market price for MTBE: around 70 cents per gallon (down from 94 cents per gallon at the end of last year)
  • Crude contract: $17.91 per barrel (down 11 cents)
  • Heating oil contract: 45.25 cents per gallon (up 0.11 cents)
  • Natural gas contract: $1.463 per MMBtu (up 2.1 cents)
  • Refining margins: extremely low

Sources:

  • "Nymex Gasoline, Crude Fall as Demand Remains Weak" by the New York Times (no date)
  • "Wisconsin Senate Approves Bill Banning MTBE" by the Wisconsin State Journal (no date)
  • "Spot Market Prices for MTBE" by DeWitt & Co. Ltd. (no date)
  • "Crude, Products Prices Lower" by Pegasus Econometric Group (no date)
  • "Heating Oil on Nymex Rebounds" by a New York-based trader (no date)
  • "Natural Gas Prices on Nymex Strengthen" by Nymex (no date)

Read more