What is Gasoline?
Gas, petrol, or gasoline is an important global commodity in the UK. It is primarily used as fuel, and is a transparent liquid. Gasoline is required for multiple forms of transportation, including automobiles, motorcycles, trucks, and airplanes. The components of gasoline include benzene and other carcinogenic substances. These can enter the ecosystem through storage tanks, mishandling, spills and leaks.
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How is Gasoline Produced?
Gasoline is manufactured by refining crude oil trading and petroleum. It is a hazardous liquid and is extremely flammable. Gasoline is responsible for the provision of more energy to the world than other commodities. The world’s primary consumer of gasoline is the United States. Crude oil supplies are centralized in the Persian Gulf (Middle Eastern countries) and throughout Alaska and the Gulf of Mexico.
Taxes on gasoline affect prices, and result in consumers paying more at petrol stations. The price you pay is also dependent upon the province, state or country where you live. If you reside in an oil-producing country like Kuwait, there is no transportation cost involved and you will always pay a cheaper price for gas.
In the event of a natural disaster, refineries can be affected, and this will cause the price of gasoline to spike.
What Factors Impact Gas Prices?
Multiple factors play a part in determining gasoline prices. The price of crude oil makes up 65% of the gas price. Other costs to consider include refinery costs and transportation costs at around 13%, and then transporting the gasoline to a petrol station near you will cost an additional 11%.
It should be remembered that gas prices are also determined by the grade of gasoline that you’re purchasing. The higher the octane fuel, the higher the price. There are several different types of grades including regular, midgrade, and premium. Fuels that have higher octane levels are less explosive when compressed. This is important for high-performance engines
Retail Cost Considerations for Gasoline
- Crude Oil Costs cover many additional costs such as the location of the drilling platforms, the salaries paid to workers, insurance-related costs, benefit payable, overheads, equipment costs, etc.
- Taxation – the price of gasoline is heavily impacted by municipal government tax, local tax, and sales tax. Many countries impose a fuel tax on transportation fuel. This is how government derives revenue for its needs. Gasoline prices will differ from country to country based on tax considerations.
- Gasoline Networks – these include the shipment method for gasoline (pipelines, railways, trucks, or oil tankers) supplies. Various retail locations are independently owned, or owned by refineries. Travel times and distance will affect the price of gasoline.
- Refinery Costs – when crude oil is converted into gasoline, costs are incurred. These costs are dependent upon multiple factors, including the type of gasoline that is being manufactured, and the type of crude oil used. Variations between states and seasons are entirely possible. The operations of specific refineries will also affect prices. Gulf of Mexico refineries are often out of commission during the summer months, owing to hurricane activity. This will push prices higher.
Where is Gasoline traded?
All gasoline futures are dealt with in the Nymex (New York Mercantile Exchange).
- All gasoline futures are dealt with in the Nymex (New York Mercantile Exchange).
- The trading hours run from 11 PM through 9:59 PM
- The MetaTrader 4 symbol is GASOLINE
- The margin requirement is 2 percent
- Gasoline can be traded in increments of 0.0001
- The minimum trade size for gasoline is 1,000
What do we offer for Gasoline trading?
- Short selling option on gasoline when prices are low
- Trade gasoline from as little as
- Enjoy trading leverage of on your trades
- Choose from a range of professional and customized trading platforms
- Enjoy social trading and algorithmic trading on our automated trading software
AvaTrade recommends that you read up more about trading gasoline by visiting the Trading Conditions & Charges Page.
Gasoline Trading Main FAQs
- What does RBOB mean in gasoline?
The acronym RBOB stands for “Reformulated Gasoline Blendstock for Oxygenate Blending”. Because RBOB gasoline is refined from crude oil there is a high correlation between crude pricing and gasoline pricing, but there is also far more involved. Gasoline refineries are often located in coastal areas, which means weather can have a huge impact on gasoline prices at times. Also of consideration is the refinery mix, or how much gasoline is being refined compared with other products like heating oil. And the taxation of gasoline, which can vary widely from one jurisdiction to another, can also have a heavy impact on gasoline prices.
- Is it better to trade crude oil or gasoline?
Both crude oil and gasoline can be traded for a profit, but there are some differences in the two markets that might help a trader determine which commodity better suits their own trading style. For example, while both crude and gasoline can be volatile, gasoline tends to have the higher volatility. Also, gasoline does have some seasonal tendencies that aren’t present to a great degree in crude. This could mean trading gasoline during the summer months and hurricane season, while trading crude during the rest of the year.
- What is the best strategy for trading gasoline?
One of the most popular and best strategies for trading gasoline is the breakout strategy. This strategy looks for prices breaking out of technical price patterns and making new highs or lows. Trading in breakout patterns look to capture the beginning of emerging trends, making these trades very profitable when they work out. This is especially true for markets that trend strongly, like the gasoline market. Popular patterns to trade using this strategy include the head & shoulders pattern, pennants, and triangles.
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