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 $1.92 per gallon (gal) on July 3, up 18 cents/gal from June 3 (Figure 2). The RBOB–Brent crack spread (the difference between the price of RBOB and the price of Brent crude oil) increased by 11 cents/gal during the same period.

The RBOB–Brent crack spread averaged 28 cents/gal in June, the lowest for that month since 2011. However, the crack spread increased at the end of the month following explosions at, and subsequent planned closure of, the Philadelphia Energy Solutions’ refinery, the largest refinery by total operable capacity on the East Coast. From June 21, the date of the refinery’s most recent outage, to June 26, the date of the announcement of the refinery’s planned closure, the crack spread increased 8 cents/gal. The late-month increase brought the monthly average RBOB–Brent crack spread for June equal to the five-year (2014–18) average.

Ultra-low sulfur diesel prices: The ultra-low sulfur diesel (ULSD) front-month futures price for delivery in New York Harbor settled at $1.90/gal on July 3, an increase of 9 cents/gal from June 3 (Figure 3). The ULSD–Brent crack spread (the difference between the price of ULSD and the price of Brent crude oil) increased by 3 cents/gal to settle at 38 cents/gal during the same period.

ULSD–Brent crack spreads remained higher than the five-year average during June and higher than the 2018 average for the first time in three months. EIA estimates that U.S. distillate consumption in June 2019 was 4.0 million b/d, 84,000 b/d higher than the previous year. The higher consumption in June could indicate a return to seasonal levels from previous months of low demand; distillate consumption in the second quarter remained 156,000 b/d lower than in 2018, at 4.0 million b/d, as flooding in the Midwest delayed seasonal agricultural activity.