Oil per Barrel to Gas per Gallon

Discussion in 'Commodity Futures' started by bkveen3, Oct 15, 2008.

  1. bkveen3


    Is there some sort of conversion that can be made based on historical data? I know that oil isn't the only input so its not a direct correlation but there is obviously some sort of connection. Does anyone know how to round about guess what $73 per barrel equals in gallons of gasoline?
  2. Last figure I had was $3 gas = $100 bbl based on a constant margin. Gas was much higher than $3 when oil was $100. Got me.
  3. bkveen3


    Well my thought process is that Oil fell rather quickly so we aren't seeing the prices from $100 per barrel till now. The refineries already paid for last months oil so the prices won't change until the front month comes due. At least that's my thought process.
  4. rosy2


    thats the crack spread. 42 gallons in a barrel.
  5. Gasoline is traded too. Maybe using those numbers might be more useful.

  6. $100/bbl = $2.50/gal on the futures markets.
  7. What rosy2 said....

    It's RBOB vs WTI crack spread.


    The crack differential is basis RBOB (i.e. priced in terms of gals not barrels) and is traded on a 1 lot v 1 lot basis as the contract size is effectively the same.

    To get the Dec crack differential, for example, take the Dec RBOB price and minus (dec wti / 42).

    I hope I got that right or's I'll be embarrassed at work tomorrow! It's late. Forgive me ha :)
  8. bunkinc


    gas crack (RB * 42 - CL)... and it's time to buy it! Z crack is about -4.00 (lowest ever i believe). how low can this thing go, i'd say not much lower.
  9. No direct correlation can be drawn between supply price and demand price because of volatility. Volatility expands and contracts and affects spreads of every kind, and it is to the oil supplier's advantage to keep volatility high, unless demand contracts to such a low level that producers are forced to cut ouput.
  10. Yep bunkinc is correct. It's priced in terms of barrels. Apologies people.

    Dec is currently -3.64 (RBOB discounted to Crude).

    There must be a whole load of RBOB about!!
    #10     Oct 20, 2008