- 10 Jul 2017
- By CME Group
The percentages above are determined by the refiner depending on market demand and supply for each of the refined products.
*Data provided by EIA November 2013
Trading energy futures products in your portfolio enables you to take advantage of many benefits NYMEX has to offer in this
market, including:
- Deep Liquid Markets – NYMEX WTI, ULSD, and RBOB Gasoline offer the deepest liquidity, largest open interest and tightest bid-ask spread of any oil benchmarks.
- Product Choice – choose from wide range of energy products – the broadest slate of crude and refined products in multiple contract sizes that enables customers to find trading opportunities with various sized portfolios.
- Access – on CME’s Globex you can trade nearly 24 hours a day.
NYMEX WTI CRUDE OIL FUTURES AND OPTIONS
West Texas Intermediate (WTI) crude oil futures have been a transparent global benchmark for crude oil prices. WTI light sweet
crude oil is of extremely high quality and can be refined into more gasoline per barrel than any other type. It is the primary type
of crude oil refined in the United States, the largest gasoline consuming country in the world.
Fundamental factors that influence WTI crude oil futures prices go beyond simply the supply of oil to include the demand for its main
refined products—gasoline, heating oil and diesel fuel. Prices of these products can also shift with the seasons and the economy.
NYMEX RBOB FUTURES AND OPTIONS
The RBOB futures contract represents blending components that make the gasoline used in cars and other vehicles, i.e.,
unleaded gas. Gasoline accounts for nearly half of U.S. petroleum product consumption, according to the U.S. Energy
Information Administration. The RBOB initials stand for Reformulated Blendstock for Oxygenate Blending.
RBOB futures prices are affected by the price of crude oil, from which it is refined, as well as the demand for gasoline. Traders
in RBOB futures find opportunities in watching the ever-shifting relationship between crude oil and its refined products, each
with its own set of supply/demand influencers.
NYMEX USLD FUTURES AND OPTIONS
Heating oil prices, driven largely by weather and seasonality, represents a unique part of the energy sector. Prices are closely pinned
to spot prices on jet fuel and diesel fuel and there are natural connections to other fuels such as crude oil and RBOB. These closely
related fuels can offer several opportunities to the trader looking to take advantage of the relationship between these markets.
CONVERSION OF RBOB PRICING TO CRUDE OIL PRICING
“Crack Spread” pricing is quoted as Refined Product minus Crude Oil. However, refined products such as RBOB or ULSD are
quoted in gallons while Crude Oil is in barrels. A conversion must be calculated in order to get a common quotation. How do we
convert knowing 1 barrel is equivalent to 42 gallons? See charts below.
Disclaimer
The information herein has been compiled by CME Group for general informational and educational purposes only and does not constitute trading advice or the solicitation of purchases or sale of any futures, options or swaps. All examples discussed are hypothetical situations, used for explanation purposes only, and should not be considered investment advice or the results of actual market experience. The opinions expressed herein are the opinions of the individual authors and may not reflect the opinion of CME Group or its affiliates. All matters pertaining to rules and specifications herein are made subject to and are superseded by official CME, CBOT and NYMEX rules. Current rules should be consulted in all cases concerning contract specifications.
Although every attempt has been made to ensure the accuracy of the information herein, CME Group and its affiliates assume no responsibility for any errors or omissions. All data is sourced by CME Group unless otherwise stated.
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Neither futures trading nor swaps trading are suitable for all investors, and each involves the risk of loss. Swaps trading should only be undertaken by investors who are Eligible Contract Participants (ECPs) within the meaning of Section 1a(18) of the Commodity Exchange Act. Futures and swaps each are leveraged investments and, because only a percentage of a contract's value is required to trade, it is possible to lose more than the amount of money deposited for either a futures or swaps position. Therefore, traders should only use funds that they can afford to lose without affecting their lifestyles and only a portion of those funds should be devoted to any one trade because traders cannot expect to profit on every trade.
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