OIL AND GAS
While many people never directly invest in unleaded gas, the magnitude of its daily uses make unleaded gas the most frequently interacted commodity on the market. Also referred to as a Reformulated Gasoline Blendstock for Oxygen Blending (gasoline RBOB futures) when it is traded, unleaded gas is used as fuel for various products including cars, lawnmowers, and other household items.
With unleaded gas a byproduct of refined crude oil, the amount of unleaded gas produced is at the mercy of how much crude oil is produced daily. The global oil industry processes more than 100 million barrels of crude oil every day. For every 42 gallons of crude oil produced, approximately 19.5 gallons of gas is manufactured.
The price of gasoline RBOB futures directly correlates with the price of a barrel of oil, which makes gas prices volatile, so it’s vital to be ahead of the market before it swings. As unleaded gas production varies based on geographical locations, political conflicts, and natural disasters, the price of unleaded gas can fluctuate greatly on a daily basis.
As unleaded gas plays a major part in everyday life, gasoline RBOB futures tend to dip in the winter months and rise before driving season in the summer. Other market conditions affecting unleaded gas prices include:
As a byproduct of crude oil, the price of unleaded gas is directly tied to the performance and production of crude oil.
With the Middle East being a major producer of crude oil, tensions in the area can severely affect unleaded gas prices.
As one of the most widely used and heavily traded commodities in the world, traders often turn to unleaded gas as a potentially lucrative commodity to help diversify their portfolio while generating positive returns. With gasoline for transportation purposes consisting of more than 40 percent of the world’s unleaded gas demand, there is no shortage of buyers in need of everyday use for unleaded gas.
By working with First City Markets, our experts can carefully guide your investment accounts through volatile energy markets with proven strategies and effective formulas. Let our years of energy trading experience help diversify and enhance your investment portfolio today.