The Market Word – RBOB

The Market Word – RBOB The Reformulated Blendstock for Oxygenate Blending is the renamed Unleaded Gas product that is simply a byproduct of Crude Oil.  The refineries typically will ramp up production for the Spring driving season.   Total motor gasoline inventories increased by 3.0 million barrels last week and are in the upper limit of the average range. Both finished gasoline inventories and blending components inventories increased last week.  It is really more about demand right now and the increased prices at the pump may contribute to the slowing demand.  The average total gasoline demand over the last four weeks has declined 7.29 % in comparison to last years.  The gasoline imports are up to 1.045 million barrels per day in comparison to 722,000 barrels a day in the previous week.   There has been turmoil in the energy sector as of late as Iran has threatened to block the Strait of Hormuz in retaliation for sanctions from the European Union supported by the US.  The majority of countries are unified in this move, willing to sign waivers to cut the importation of the Iran oil as of July 1st.  China is undecided on the sanctions as it needs a large quantity of oil for its growing economy, but the country has indicated that it does not advocate the creation of nuclear arms.  The sanctions have had foreign leaders taking their stands!  India may increase their purchases from Iran.  Saudi Arabia has claimed that they can boost their production due to their previous investment in the oil fields to compensate for any deficit in product that Iran may have created.  UN nuclear inspectors have been invited back to Iran for talks to reach an accord regarding the use of the enriched uranium in the mountainside establishment. 

Technically, the April RBOB is in first day sell mode according to the Wilder’s Parabolic SAR!



Sample Trade Opportunity! Sell April RBOB (ERBJ12) at $3.0000!  If filled, buy ERBJ12 at $3.0200 Stop or buy ERBJ12 at $2.8800 Limit (Target).  The risk on this trade is $840.00 plus fees and commissions.  The potential profit on the trade would be $5,040.00 less fees and commissions.  The expiration is March 30th.