Summer is over and lower gas prices are on the way

By: George Butler / August 17, 2018

imageAs summer winds down and eases back into school, football, and cooler temps, less expensive higher Reid Vapor Pressure (RVP) grades of gasoline enter the distribution system.

Pittsburgh, PA is of particular interest as it appears Reformulated Gasoline (RFG) may have made its last appearance there and the surrounding counties. For twenty years Pittsburgh consumers have paid much higher gas prices than the rest of the state, excluding Philadelphia. Premium Reformulated gasoline Premium Blendstock for Oxygentate Blending (PBOB) is the most expensive product in the U.S. outside of California. The Environmental Protection Agency along with state legislators have agreed to relax the RFG standard in Pittsburgh and the surrounding seven counties.

On September 16th Pittsburgh goes back to conventional grade products anyway. The current wholesale 87 grade price spread is $0.0920 per gallon between the two products. Along with the specification change, the spread between  September to October NYMEX futures has been trading around $0.10 in backwardation as well.  While you can continue to sell RFG gasoline past September 15th, the price downgrade to conventional coupled with the futures decrease, will have suppliers running themselves out to avoid carrying the RFG barrels any longer than they have to.

 So while all of the above is good news for consumers, it's bad news for wholesalers who are scrambling.

Categories: Gas Prices, gasoline, RFG gasoline

George Butler

Written by

George Butler

Guttman Energy Daily Market Update Disclaimer – The information contained in this market update is derived from sources believed to be reliable; however this update could include technical inaccuracies or typographical errors and Guttman Energy does not guarantee the accuracy, completeness or reliability of this update. FURTHERMORE, THIS UPDATE IS PROVIDED "AS IS," WHERE IS, WITH ALL FAULTS AND WITHOUT ANY WARRANTY OR CONDITION OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY. GUTTMAN ENERGY ALSO SPECIFICALLY DISCLAIMS ALL EXPRESS AND IMPLIED WARRANTIES. YOU USE THIS UPDATE AT YOUR SOLE RISK. This update and any view or comment expressed herein are provided for informational purposes only and should not be interpreted in any way as recommendation or inducement to buy or sell products, commodity futures or options contracts.


Subscribe to our blog

Price Feed

Stay up-to-date on current fuel prices and market trends with our NYMEX price feed (15 minute delay to the live market).

© 2018 Market data provided and hosted by Barchart Market Data Solutions. Fundamental company data provided by Morningstar and Zacks Investment Research. Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see disclaimer.


Contact Us