Ethanol Blog

RBOB Gasoline Futures Continue Slide

Rick Kment
By  Rick Kment , DTN Analyst

RBOB gasoline futures have fallen more than 25 cents per gallon through early March, which could indicate that the seasonal high may have been set through February.

Three of the last four years, the seasonal high has been hit during March. With continued pressure developing through the entire energy complex, there may be some additional softness developing in RBOB gasoline prices over the coming weeks as futures follow seasonal patterns.

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Ethanol prices are also trading moderately lower as the expected pullback in energy markets is limiting spill-over buyer support across the ethanol market. Traders are also focusing on the recent stability in corn prices and the limited increases in production cost as a reason to back away from previous ethanol price ranges. But the current discount ethanol markets hold to the RBOB gasoline complex is expected to also minimize the price dips, allowing front-month ethanol futures to trade in a narrower range.

This could easily keep nearby ethanol contracts range bound between $1.40 and $1.50 per gallon through most of the spring, unless a major shift develops in either gasoline prices or corn markets.

Rick Kment can be reached at rick.kment@dtn.com

(ES)

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