The assessed spot price of Gulf Coast CBOB dipped below $2/gal Wednesday for the first time in four years with the transition to winter-grade gasoline in the market and under pressure from worldwide crude values.
Platts assessed CBOB at 13.5 RVP at NYMEX November RBOB futures minus 17 cents/gal and at an outright of $1.9863/gal.
The blendstock last was below $2/gal on October 29, 2010, at $1.9922/gal and last was lower than Wednesday's assessment at $1.9848/gal on October 21, 2010.
CBOB fell on ATMI's sale of 25,000 barrels each to Murphy Oil and Northville in the Platts Market on Close assessment process.
Wednesday marked the first day of assessments of CBOB at 13.5 RVP. Winter-grade gasolines use more butane, ignite at higher temperatures and are cheaper to produce.
The spot assessment dipped 9.48 cents Wednesday and was 43.15 cents below the spot assessment on October 22, 2013.
"I have to think that $80 crude is a good chunk of the reason," a US products trader said about the drop. "Also refiners are slowly coming back from maintenance. What I don't get is that there are bearish markets, with flat prices, yet [the market keeps] the structure in backwardation."
Gulf Coast cash markets reflected backwardation of 17 to 20 points/day on Wednesday.
"I thought a week ago when the world said $80 was the bottom, it ain't the bottom. Tops and bottoms are not that simple. They tend to inflict measured pain first," the trader said.
