The spread between RBOB and CBOB on the US Atlantic Coast fell to its narrowest point in almost five months Tuesday as blenders begin to their shift their attention to winter-grade blendstocks and restrict supplies of summer-grade CBOB, a market source said.
S&P Global Platts on Tuesday assessed F2 RBOB, the USAC summer-grade RBOB at $1.4958/gal. The 9 RVP CBOB assessment on Tuesday was $1.4838/gal. RBOB is inherently more valuable than CBOB and historically trades at a premium. That premium, however, varies with market forces.
On Tuesday, the spread between the two blendstocks was 1.2 cents, its narrowest point since April 5. Platts will begin assessing 13.5 RVP gasoline and blendstocks as a supplemental assessment starting September 9.
The narrowing spread between the two blendstocks stems from the ongoing strength in 9 RVP CBOB, a blendstock which is in increasingly short supply as blenders have begun shifting their production to 13.5 RVP blendstocks, an Atlantic Coast gasoline source said.
Currently, the margins for 13.5 RVP CBOB, which is used to make M4, a 13.5 RVP conventional gasoline, are much stronger than those for the summer grade 9 RVP. As blenders turn their attention to increasing supplies of 13.5 RVP CBOB, they produce less of the summer-grade 9 RVP CBOB.
"They will still make 308 and 328 (summer grade CBOB), but it is more profitable to blend up the 13.5 RVP (winter-grade)," he said.
