Gasoline Futures Soar on Reformulated Gasoline News Amid Supply Concerns

Strategic Insights -

Washington -- The futures contract for February delivery of gasoline on the New York Mercantile Exchange (Nymex) surged 1.55cts. to 57.76cts./gallon on Tuesday due to news about reformulated gasoline (RFG). The news from New Jersey Gov. Christine Todd Whitman that the state would phase in its new oxygen requirement for RFG next fall instead of this winter relieved traders' anxiety about the Nymex gasoline contract. This move caused gasoline prices to run high and strong, according to Rudy Stoett of New York-based Paribas Futures Inc. The low gasoline inventories of about 213 million bbl, combined with an unusually warm winter that encouraged driving, are exacerbating supply concerns.

Key Takeaways:

  • Gasoline futures for February delivery on the Nymex rose 1.55cts. to 57.76cts./gallon on Tuesday due to news about reformulated gasoline (RFG).
  • New Jersey Gov. Christine Todd Whitman's announcement to phase in the new oxygen requirement for RFG next fall instead of this winter relieved traders' anxiety and contributed to the increase in gasoline prices.
  • Low gasoline inventories, at around 213 million bbl, and an unusually warm winter that encouraged driving are exacerbating supply concerns.
  • Nymex March light, sweet crude rose 30cts. to $18.39/bbl, and April crude climbed 29cts. to $18.24/bbl, indicating supply tightness due to weather-related loading delays in the North Sea and the Black Sea's Novorossiisk terminal.
  • Analysts saw some supply tightness for crude due to weather-related loading delays in the North Sea and the Black Sea's Novorossiisk terminal.
  • February heating oil dropped 0.56cts. to 46.86cts./gallon on expiration, but March and April gasoline futures rose, indicating a mismatch between heating oil and gasoline prices.

Statistics:

  • The futures contract for February delivery of gasoline on the Nymex rose 1.55cts. to 57.76cts./gallon on Tuesday due to news about reformulated gasoline (RFG).
  • New Jersey Gov. Christine Todd Whitman's announcement to phase in the new oxygen requirement for RFG next fall instead of this winter relieved traders' anxiety and contributed to the increase in gasoline prices.
  • Gasoline inventories stood at around 213 million bbl, which is considered low, especially in light of an unusually warm winter that encouraged driving.
  • Nymex March light, sweet crude rose 30cts. to $18.39/bbl, and April crude climbed 29cts. to $18.24/bbl, indicating supply tightness due to weather-related loading delays in the North Sea and the Black Sea's Novorossiisk terminal.
  • February heating oil dropped 0.56cts. to 46.86cts./gallon on expiration, and March and April heating oil futures fell, indicating a mismatch between heating oil and gasoline prices.

Sources:

  • New York Mercantile Exchange (Nymex)
  • New Jersey Gov. Christine Todd Whitman
  • Rudy Stoett of New York-based Paribas Futures Inc.
  • International Petroleum Exchange (IPE)