RB February March Spread

Overview

The RB February March spread has positive momentum and a stepladder up look since making the low 4 sessions ago.

Somewhat helpful to the gasoline/RB narrative is the DOE statistics seen yesterday showing gasoline production having fallen by 472 MBPD to 9.000 MMBPD. Yet, gasoline inventories rose on the week by 7.702 MMBBL, as demand fell by 393 MBPD to 8.170 MMBPD, lagging the prior 2 years demand by 311 and 155 MBPD.  But, somewhat helpful to the RB contract is the fact that as per the DOE stats, the gasoline inventories in Padd 1--the RB contract delivery point- were unchanged. RBN Energy analysis says that the gasoline inventory rise was due to the holiday season demand being weak.

Also supportive to the front end curve of the RB contract are 2 things we are seeing on the flat price charts. One is the RB DC chart showing the contract today rising above the highs of the prior 7 sessions. Secondly, the weekly continuation chart is showing momentum that looks to be bottoming and getting ready to turn positive. The weekly chart attached shows that seasonally the RB contract rallied for a few weeks at least from the first week of January in each of the prior 4 years. 

The February March RB spread has upside resistance at -2.10 cents and then at -1.77 cents. Support for February versus March is seen below at -2.5 cents and then at the recent lows at -2.98 cents. Current value for the spread is -2.24 cents.

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