|
Gasoline is the largest single volume refined product sold in the United States and accounts for almost half of national oil consumption. It is a highly diverse market, with hundreds of wholesale distributors and thousands of retail outlets, making it subject to intense competition and price volatility.The NYMEX Division New York harbor unleaded gasoline futures contract and reformulated gasoline blendstock for oxygen blending (RBOB) futures contract trade in units of 42,000 gallons (1,000 barrels). They are based on delivery at petroleum products terminals in the harbor, the major East Coast trading center for imports and domestic shipments from refineries in the New York harbor area or from the Gulf Coast refining centers.The unleaded gasoline contract specifications conform to those for oxygenated gasoline, required in many areas for controlling emissions that can adversely affect air quality. With the ongoing phaseout of the oxygenate methyl tertiary butyl ether (MTBE) the industry is shifting towards ethanol.RBOB conforms to industry standards for reformulated regular gasoline blendstock for blending with 10% denatured fuel ethanol (92% purity) as listed by the Colonial Pipeline for fungible F grade for sales in New York and New Jersey. RBOB is a wholesale nonoxygentated blendstock traded in the New York Harbor barge market that is ready for the addition of 10% ethanol at the truck rack.To ensure that the terms and conditions of the gasoline futures contract continue to mirror the cash market, the Exchange maintains close contact with federal and state officials and continues to evaluate changes in the regulations.Along with the futures contracts, options contracts, calendar spread options contracts, crack spread options contracts, and average price options contracts provide a slate of flexible, liquid financial instruments. Exotic options contracts are offered as well, under the calendar spread option, average price option, crack spread option, European “look alike” option, and conventional gasoline vs. RBOB option. The Exchange also lists for trading on the NYMEX ClearPort� trading platform a series of gasoline swap futures contracts based on crack spreads and location differentials, including European and average price options. Transactions in these contracts can also be consummated off-exchange and submitted to the Exchange for clearing through the NYMEX ClearPort� clearing website.1. Oil WellCrude oil is discovered following lengthy scientific studies to determine the possible presence of underground deposits of petroleum (oil and natural gas). Contrary to popular belief, oil is trapped in the tiny pores of underground rock – not contained in subterranean pools. After studies determine the potential presence of an oil-bearing formation, an exploratory well is drilled. More than half the time, the well will turn out to be unsuccessful – a “dry hole.” If resources are discovered in commercial quantities, a production well is installed. In discoveries yielding both oil and natural gas, the heavier oil collects near the bottom of the reservoir, and production well is sunk into this area. The oil -- driven by the natural gas, which is often under high pressure -- flows to the surface. Over time, the pressure may decrease, requiring the installation of a pump on the well. Wells can be pumped from the surface by the familiar rising and falling “horse head” pump jacks or by long slender submersible pumps that operate deep inside the well bore. Water, steam and natural gas are often injected into older fields in order to increase the amount of oil produced.2. Crude Oil TankerCrude oil produced in other countries such as Venezuela, Norway or Saudi Arabia is another important source of raw material for gasoline refined in this country. Most often it transported by large tankers and delivered to docks near refinery installations. In addition, some gasoline is manufactured in offshore refineries and shipped to U.S. as a finished petroleum product. More than 60 percent of all the oil consumed in the United States is imported. Tankers also bring Alaska’s crude oil production – more than 1 million barrels a day – to refineries on the West Coast.3. Pipeline and Pumping StationCrude oil destined to become gasoline most often is moved to refineries by pipeline, although tanker trucks are often used to pick up the oil produced in smaller, scattered fields. Pumping stations keep the crude oil moving. They are spaced from 20 to 200 miles along the route, depending on the pipeline’s pressure and the terrain through which it is running. One of longest and largest pipelines in the United States is the 800-mile-long Trans Alaskan Pipeline completed in the 1970s.
|
