Registered: Dec 2006
Posts: 3771

Hello,

Is there some knowledgeable energy traders to explain why for Gasoline April is higher than the end of spring and the summer months? Is this situation supposed to continue until expiration?

Thanks

Registered: Mar 2008
Posts: 781

Seems to be typical of the NY curve. Eurobob seems to have a 1 month lag.



My only assumption is that refineries change their outputs during the Mar/Apr timeframe to yield less HO and more RBOB as winter wanes and demand comes back from the consumer. Not much RBOB demand during the Nov-Mar months.

Registered: Dec 2006
Posts: 3771

Yes, and also the "jumps" between mar/apr and sep/oct due to the change in the characteristics of the Gasoline makes it harder to visualize the curve.

The thing is I don't understand why the highest month is so ahead of the driving season. I know price usually anticipates higher demand, but it seems too early.On Ethanol the highest month is more like June. It is a recent development on Gasoline. Back in the day I think summer months were higher than April( I have to check again ).

Registered: Mar 2008
Posts: 781

Maybe you can infer something from this that I couldn't:

RB demand:


RB supply:


Sources

Registered: Dec 2006
Posts: 3771

It seems I was wrong. Here are annual Apr/jul spreads from 2000. It is quite usual indead for April to settle higher than summer months. It's just that this year the spread is at record high for this time of the year( purple ). Last year the spread exploded just before the delivery period( red ):

Registered: Mar 2008
Posts: 781

Nice graph. What software is that?

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