Gasoline is the largest single volume refined product sold in the United States and accounts for almost half of national oil consumption. It is a highly diverse market, with hundreds of wholesale distributors and thousands of retail outlets, making it subject to intense competition and price volatility.The unleaded gas futures contract specifications conform to those for oxygenated gasoline, required in many areas for controlling emissions that can adversely affect air quality. With the ongoing phaseout of the oxygenate methyl tertiary butyl ether (MTBE) the industry is shifting towards ethanol.
The NYMEX Division New York harbor unleaded gasoline futures contract and reformulated gasoline blendstock for oxygen blending (RBOB) futures contract trade in units of 42,000 gallons (1,000 barrels). They are based on delivery at petroleum products terminals in the harbor, the major East Coast trading center for imports and domestic shipments from refineries in the New York harbor area or from the Gulf Coast refining centers.
RBOB conforms to industry standards for reformulated regular gasoline blendstock for blending with 10% denatured fuel ethanol (92% purity) as listed by the Colonial Pipeline for fungible F grade for sales in New York and New Jersey. RBOB is a wholesale non-oxygentated blendstock traded in the New York Harbor barge market that is ready for the addition of 10% ethanol at the truck rack.To ensure that the terms and conditions of the gasoline futures contract continue to mirror the cash market, the Exchange maintains close contact with federal and state officials and continues to evaluate changes in the regulations.Along with the futures contracts, options contracts, calendar spread options contracts, crack spread options contracts, and average price options contracts provide a slate of flexible, liquid financial instruments.The Exchange also lists for trading on the NYMEX ClearPort trading platform a series of gasoline swap futures contracts based on crack spreads and location differentials. Transactions in these contracts can also be consummated off-exchange and submitted to the Exchange for clearing through the NYMEX ClearPort clearing website.
Source: New York Mercantile Exchange, Inc