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) settled at $1.65 per gallon (gal) on January 9, 2020, up 8 cents/gal since December 2 (Figure 2). The RBOB–Brent crack spread (the difference between the price of RBOB and the price of Brent crude oil) decreased by 3 cents/gal to settle at 10 cents/gal during the same period.

RBOB prices kept pace with rising crude oil prices in December, which left the crack spread nearly unchanged. EIA estimates that December gasoline inventories were the highest for any December since 1981. Gasoline consumption typically increases from November to December but, in 2019, December gasoline consumption declined from November and was less than the December five-year (2014–18) average, which likely contributed to what EIA estimates was the second largest December stock build on record in data going back to 1981.

Ultra-low sulfur diesel prices: The ultra-low sulfur diesel (ULSD) front-month futures price settled at $1.95/gal on January 9, 2020, an increase of 6 cents/gal higher from December 2, 2019. The ULSD–Brent crack spread (the difference between the price of ULSD and the price of Brent crude oil) decreased 4 cents/gal to settle at 39 cents/gal during the same period (Figure 3).

The ULSD-Brent crack spread remained wider than average through December but narrowed sharply in early January after inventories rose 14 million barrels in the two weeks ending January 3, 2020. Distillate inventories had declined to lower than the five-year minimum in October and November, providing support to crack spreads. However, mild weather helped to reduce distillate consumption in December to what EIA estimates would be the lowest December consumption since 2012. The lower consumption also contributed to what EIA estimates is the largest December distillate stock build on record in data going back to 1945.