Petroleum Products

Gasoline Prices: The front-month futures price of reformulated blendstock for oxygenate blending (RBOB, the petroleum component of gasoline used in many parts of the country) rose 9 cents per gallon (gal) from December 1 to settle at $1.64/gal on January 5 (Figure 2). The RBOB-Brent crack spread (the difference between the price of RBOB and the price of Brent crude oil) rose 2 cents/gal over the same period.

In late December, the RBOB price reached its highest point since August 2015, supported by strong international demand for gasoline. Initial weekly estimates show that U.S. gasoline exports set a record high in December 2016 of 1.0 million b/d, as refiners on the U.S. Gulf Coast continue to increase gasoline exports to destinations including Mexico and South America.

Ultra-low Sulfur Diesel Prices: The front-month futures price for the New York Harbor ultra-low sulfur diesel (ULSD) contract rose 5 cents/gal from December 1 to settle at $1.69/gal on January 5. The ULSD-Brent crack spread was mostly stable over the same period, down 2 cents/gal (Figure 3).

U.S. distillate stocks rose to the top of the five-year range in December. Additionally, distillate stocks in the Petroleum Administration for Defense Districts 1A and 1B, which are regions in the U.S. Northeast that have the highest share of households using distillate for home heating, set a new five-year high. High distillate inventory levels, particularly in areas in the U.S. Northeast, could moderate any impact of cold temperatures on ULSD price movements in the coming weeks.