Preseason Rally for US Gasoline Futures so far Muted

Article by Brian L. Milne, Energy Editor, Product Manager with Schneider Electric

The wholesale US gasoline market is in the midst of its seasonal transition from winter-grade gasoline to the more costly to produce summer-grade product, and demand is expected to increase as the warmer weather encourages driving. This is the time of year when gasoline futures advance toward their annual high, and futures are climbing, yet based on historical data are demonstrating less oomph then might be expected.

Called reformulated blendstock for oxygenate blending, the gasoline futures contract traded on the New York Mercantile Exchange ended March with seven consecutive sessions with an advance, with the nearest delivered futures contract rallying 9.5cts or 6% during the week-ended March 31. Still, the now expired April contract remained below the $1.7257 gallon 18-month high on the spot continuous chart registered March 1, as concern over subdued gasoline demand capped the upside and pressed the contract to a $1.5623 gallon March low.

The seasonal chart shows NYMEX RBOB futures trading at a premium to 2016’s price performance, while trailing 2015’s values. In 2016, RBOB futures traded at an annual intraday high on May 24 at $1.6664 gallon, and in 2015 at $2.1858 gallon on June 17.

The gasoline futures contract is holding well below the 2011-2014 seasonal price patterns, with oil futures selling off hard during the second half of 2014 as a supply glut swamped the market. Now in its third year, a globally oversupplied market continues to limit price gains, although there are signs that the global oil market is drawing down inventory after three months of production cuts by the Organization of the Petroleum Exporting Countries.

OPEC and 11 non-OPEC oil producing countries agreed to cut their crude production by nearly 1.8 million bpd during the first six months of 2017, and OPEC compliance with their agreement has been strong at over 90%. Yet, US crude production has soared with higher global crude prices, which are again over $50 bbl. Since the start of 2017, US crude production is up 377,000 bpd to a nearly 14-month high of 9.147 million bpd, and is expected to continue to grow, mitigating the OPEC-led production cuts and capping the upside in fuel prices.

Gasoline futures did shift into a bullish backwardated market structure as May RBOB futures rolled into the nearest delivery position with the expiration of the April contract on March 31. A market is in backwardation when supply nearest to delivery trades at a premium to deferred delivery, with the price premium in a nearest to delivery contract occurring despite the storage and hedging costs associated with deferred delivery contracts.

Although in a bullish market structure, too much gasoline supply has weighed on the front end of the forward curve since 2016, limiting price gains in the wholesale and retail markets. In the primary wholesale market, physical supply is traded in bulk transactions as they move from the refinery gate to distribution terminals, with those trades indexed against the nearest or second nearest delivered futures contract.

Gasoline supply was drawn down in the fourth quarter and rebuilding early in the first quarter in agreement with the market’s seasonal tendency. On February 10, US gasoline supply reached a record high of 259.063 million bbl, according to data from the Energy Information Administration, with EIA weekly data dating back to 1990. Gasoline supply has been drawn down consistently since reaching the record high, down nearly 20.0 million bbl or 7.5% through March 24 to 239.7 million bbl, slipping 1.2% below the comparable week in 2016.

Seasonal refinery maintenance should continue the draw down through April, but will the decline in inventory be enough to buoy the flaccid preseason rally?

The answer will fall to demand, which so far in 2017 trailed year ago by a sizeable 380,000 bpd or 4.2% cumulatively through March 24 at 8.745 million bpd, according to data from the EIA. In 2016, implied gasoline demand averaged a record 9.35 million bpd.

US Gasoline Futures Drop Back in Spring Transition

Sliding from a 1-1/2 year high on the first day of March, the April gasoline futures contract rolled into the nearest delivery position in trading on the New York Mercantile Exchange, signaling the spring transition to more stringent fuel specifications.

Known as the Reformulated Blendstock for Oxygenate Blending contract, April RBOB futures rallied to $1.7257 gallon on March 1, the highest trade on the spot continuous chart since mid-August 2015, after settling 21.74cts above the now expired March contract on the last day of February. However, too much gasoline supply and weaker-than-expected gasoline demand in early 2017 pressed the April contract down more than a nickel to settle at $1.6780 gallon on March 1.

Will pricing in the wholesale gasoline market mimic the old Pennsylvanian maxim about March — “In Like a Lion, Out Like a Lamb?”

Gasoline supplied to market in 2017 through February 24 averaged 8.451 million bpd, down a steep 534,000 bpd or 6% compared with a similar timeline in 2016, while also below an 8.5 million bpd five-year average, according to data from the Energy Information Administration.

However, the statistic might be overstating the bearishness in consumption when you consider gasoline demand in 2016 reached a record high of 9.35 million bpd, while the current 2017 cumulative average is greater than in 2013 when it was 8.3 million bpd, above 2012’s 8.39 million bpd average, and tops the 2011 average of 8.19 million bpd.

Indeed, gasoline demand surged during the first three quarters in 2016 before tapering off in the fourth quarter as retail prices gained sharply. The U.S. retail gasoline average is currently more than 50cts higher than a year ago, reaching $2.314 gallon on February 27 for regular grade according to an EIA survey. Poor weather in California has also been credited in hamstringing gasoline demand in early 2017.

“This YOY declining trend actually began at the end of 2016 and has led to record levels of gasoline in storage and the lowest gasoline margins we have seen in some time. It is also causing refiners to review their operating strategies after running “full out” over the last couple of years to satisfy strong domestic and export demand,” writes Turner, Mason and Company in their most recent John Auers’ Turning Point blog.

Commercial gasoline inventory in the United States reached a record high of 259.1 million bbl on February 10, while drawn down roughly 3.2 million bbl over the following two weeks to 255.9 million bbl as of February 24, EIA data shows. Gasoline supply along the PADD 1 East Coast also reached a record high on February 10 of 76.3 million bbl, while down 1.3 million bbl to 75 million bbl on February 24. The high inventory level prompted some tankers ready to offload gasoline in the New York Harbor to be rerouted in February.

Analysts note March and April are peak months for unit shutdowns during the spring refinery maintenance season, with those outages set to help pare down the oversupply. Moreover, January and February are historically the weakest months for gasoline consumption, and as the weather warms driving demand will climb.

Wholesale prices look vulnerable to the downside in March nonetheless, as talk abounds in the market that some refiners will slash their offers to move out winter grade gasoline to make room for lower Reid vapor pressure product. RBOB futures forward curve through August delivery illustrates the likely cap on wholesale gasoline prices, with the modest contango–a market structure in which nearest delivery is priced at a discount to deferred delivery–at less than 7cts a gallon. August RBOB futures settled at $1.7468 gallon on March 1.

Another sign suggesting price weakness, noncommercial traders, also known as speculators since they are not buying a futures contract to hedge an underlying physical position in the market, have consistently reduced their exposure to higher prices since reaching a 10-month net-long high on January 18. Speculators have liquidated 30,134 or 34% of their long RBOB futures positions since reaching the high to 58,535 contracts as of February 21, the Commodity Futures Trading Commission shows in their weekly Commitment of Traders report, with a long position taken on expectations prices would move higher.

Until the oversupply clears, gasoline prices will be capped. However a robust U.S. economy and ongoing gains in employment could help accelerate the drawdown.


The stock market continued its tear, with the Dow Jones Industrial Average rallying through the 21,000 mark for the first time on March 1, and U.S. manufacturing expanded in February, with the Purchasing Manager’s Index climbing a more-than-expected 1.7 points to 57.7 according to the Institute for Supply Management, with readings above 50 indicating expansion.

At 4.8% in January, the national unemployment rate is at 10-year low, and the labor participation rate has ticked up 0.3% since Trump won the presidential election to 62.9% in January, although remains near its lowest point in 40 years.

The string of positive economic data has enlivened consumer sentiment, with the Conference Board, a private international company, reporting consumer confidence in the United States at a 15-year high in February. These data sets indicate consumers are bullish.

To learn more about Schneider Electric’s energy and commodity trading platform, DTN ProphetX click here.

Article by Brian L. Milne, Energy Editor, Product Manager with Schneider Electric

The market was gloomy in 2016, but OPEC cut provides some hope in 2017

AS DEMONSTRATED with Brexit, the Columbian peoples’ rejection of a peace accord with FARC and the election of Donald Trump as the 45th President of the United States along with Republican majorities in both chambers of Congress, predicting outcomes is no easy task. With the exception of Republicans holding the House of Representatives, forecasters overwhelmingly predicted the opposite outcome to these stunning elections.

Yet price forecasting is a required endeavor for the oil industry, and oil futures are notoriously volatile. Fortunately, the market offers a variety of information that can be captured and studied, and adjustments and corrections can be made to most positions taken in oil futures. As we look into the 2017 horizon, a quick study of key drivers to the price action for West Texas Intermediate futures traded on the New York Mercantile Exchange in 2016 will provide counsel.


It was a gloomy market in early 2016, with WTI futures plunging to a $26.05 bbl multi-year low in February, as oversupply swamped futures values. Noncommercial traders held the fewest long positions, a bet prices would move higher, in more than 3-1/2 years. Yet, in less than four months, nearest delivered WTI futures would nearly double, topping $50 bbl in May even as global oversupply persisted.

A turnaround in the market’s psychology, aided by historically strong early year gasoline demand was a key factor that rallied WTI futures from winter to late spring. A market follower can capture this data updated weekly by the Commodity Futures Trading Commission in their Commitment of Traders report that can be analyzed with DTN ProphetX software (see screenshots).

The market’s psychology is reflected through the disposition of noncommercial traders who are speculating when buying a futures contract since they are not hedging a physical position in the underlying market. The accompanying chart highlights the frequent incongruities between sentiment and fundamentals, with noncommercial traders adding long WTI positions even though domestic commercial inventory continued to build.

Commercial crude inventory in the United States was drawn down in the second quarter from a late April peak well above 500 million bbl, according to data from the Energy Information Administration. Nonetheless, supply remained at stubbornly elevated levels despite record high implied gasoline demand in 2016 which peaked in June, said EIA. By mid-July, crude stockpiles were again growing, accelerating long liquidation that pressed nearest delivered WTI futures below $40 bbl in early August.


The summer’s bearishness was also reflected in widening WTI calendar spreads that had narrowed by roughly 80% from the early first quarter to the end of the second quarter on expectations demand growth would overtake new supply and gradually whittle down bloated inventory as low market prices took their toll on production activity. Indeed, US crude production dropped to a 26-month low in ending June. However, domestic output edged higher, although sporadically, into the fourth quarter before making substantial gains in November, as WTI futures traded on either side of $50 bbl in October.

The contango widened in the summer with the production gains, illustrating bearishness driven by fundamental factors. However, market sentiment again changed in August, and abruptly, as talk by the Organization of the Petroleum Exporting Countries to reinstate a production quota previously jettisoned in 2014 prompted short covering after the mid-summer selloff.

For nearly four months, the market was enslaved by what action OPEC would take on production, last cutting their output eight years prior. The market had its qualms that OPEC would actually reach an accord to tighten their production, having failed to act on multiple occasions earlier in the year amid member combativeness, and again unwound long positions. However, a pledge reached in late September in Algiers ended the selloff, and rallied the WTI contract amid renewed bullish sentiment to a 15-month high in October.


While ending September with a pledge to reduce production, details on terms, including individual member quotas were to be determined ahead of OPEC’s biannual summit in Vienna on November 30, sparking jockeying among the 14 members for terms that often fulfilled their self-interest. OPEC members pumped at a record production rate of 33.83 million bpd in October, according to the International Energy Agency, casting doubt that the producer group would reach an agreement.

The disharmony between word and action soured the market, again triggering long liquidation by noncommercial traders as market sentiment turned bearish, driving nearest delivered WTI futures to a multi-month low in mid-November.

As experienced in early August and late September, increasing bearish bets sets the market up for a short covering rally. WTI futures spiked more than 8.5% on November 30 in an initial reaction to an OPEC agreement to cut production by 1.2 million bpd beginning in January 2017. Market sentiment was again turning bullish.

As we peer into 2017, the OPEC agreement should provide price support for WTI futures. However, analysts note higher crude values will prompt increased production, notably by US shale oil producers, that diminishes the agreement’s bullishness. That leads us to WTI’s forward curve which remains under $60 bbl for the next several years, as the accompanying chart illustrates. Keep an eye on long-dated deliveries for clues on an evolving shift in sentiment, cutting through the market’s noise with DTN ProphetX.

Gasoline Futures Surge 12% in December to New High

Article by Brian L. Milne, Energy Editor, Product Manager with Schneider Electric

The gasoline futures contract traded on the New York Mercantile Exchange surged 12% in December, with reformulated blendstock for oxygenate blending futures establishing a new calendar year high for 2016 at $1.7038 gallon between the Christmas and New Year’s Day holidays. Gasoline futures outpaced the advance by West Texas Intermediate and ULSD futures in December which both rallied 9%, as bullish sentiment took control of the market.

Spurring the market’s bullish psychology were agreements to reduce production by the Organization of the Petroleum Exporting Countries on November 30 joined by a companion pact on December 10 when 11 non-OPEC producing countries also agreed to cut output. Combined, the two agreements call for a 1.758 million bpd cut in production that, if adhered to, would push global oil demand over production midyear, according to several analysts including the International Energy Agency.

The agreements took effect January 1 and are for six-month terms, although country commitments call for an average at the quota level to be reached by June, so some production cuts might not start right away. This feature could puzzle analysts during the interim as they scrutinize monthly production data for compliance, likely sparking increased price volatility.

Noncommercial traders, also known as speculators since they are not using a futures contract to underpin a physical position in the underlying market, covered short positions and accumulated long positions in NYMEX RBOB futures in reaction to the November 30 agreement. A long position is taken on expectation prices would move higher over time.

A rebalancing market will still need to contend with an abundant quantity of oil in inventory. However, the production cuts would gradually chop down the mountain of supply that has grown over the past couple of years and, in turn, underpin a higher global oil price.

This expectation was lent support late in 2016 on a string of data suggesting a quicker expansion of the US economy in 2017, with the Bureau of Economic Analysis in late December reporting a 3.5% annualized growth rate in US gross domestic product for the third quarter 2016–the largest quarterly expansion in two years. Greater economic activity consumes more oil.

The US Federal Reserve lifted the federal funds rate in December for only the second time in 10 years on evidence it finds supporting a stronger US economy that, in large part, propelled the US dollar to a 14-year high. Consumer confidence in the United States reached a12-year high in December, with a new administration in Washington, DC, seen creating broader economic opportunity.

A confident consumer is willing to spend more of his or her hard earned currency which bodes well for fuel retailers. As we look at RBOB futures forward curve, we see an increasing premium built into gasoline prices in early 2017 which reach the mid to upper $1.80 gallon range in April, May and June.

Climbing gasoline prices could erect a speed bump to higher sales volume for retailers and suppliers alike in 2017 should demand slow, as witnessed in in late 2016. Although implied gasoline demand set a record high in 2016, demand slowed late in the fourth quarter against the comparable year-ago period as gasoline prices gained.

EIA data shows during the four-week period ended December 23, gasoline supplied to market averaged 9.045 million bpd that, while a strong reading, trailed the same four weeks in 2015 by 260,000 bpd or 2.8%. For the year through December 23, implied gasoline demand averaged 9.367 million bpd, up 211,000 bpd or 2.3% against 2015.

The US average for regular grade gasoline sold at retail outlets reached a six-month high of $2.364 gallon on December 26, according to EIA data, 32.5cts above year prior. The lower price point in late 2015 was seen incentivizing demand.

In a recent note to clients, Tim Evans, futures specialist with Citi Futures, highlighted gasoline demand’s response to prices, saying, a decline in gasoline prices in 2015 lent support to demand with growth up as much as 3.4% in the 12 months ended in September 2015.

“Since then we’ve seen a slowing to 2.0% growth in the 12 months through September 2016. Looking ahead to next year,” said Evans on December 22, “we would not be surprised if growth slows to something more like 1.0-1.5%, a more sustainable pace in our view.”

Gasoline exports from the United States, which are included in the products supplied statistic, surged in 2016, reaching a weekly record high of 1.1149 million bpd in late December. Moreover, the trend looks sustainable, as US refineries produce more gasoline than needed by the domestic market amid the country’s oil and gas renaissance.

Much of those exports have been shipped to Mexico, where growing domestic consumption joined refinery constraints and outages to spur the demand for US barrels. Mexico is gradually liberalizing its gasoline market, including on imports, which would aid US refineries that are producing well above their historical average.

To learn more about Schneider Electric’s energy and commodity trading platform, DTN ProphetX click here.

US Gasoline Prices Spike in Response to OPEC Deal

Article by Brian L. Milne, Energy Editor, Product Manager with Schneider Electric

The January reformulated blendstock for oxygenate blending futures contract on the New York Mercantile Exchange settled at a better than five-month high on the spot continuous chart in concluding its first session as nearest delivery on December 1, continuing a midweek rally ignited by an historic agreement by the Organization of the Petroleum Exporting Countries (OPEC).

After two sessions, which included the expiration of the December RBOB contract on November 30, nearest delivered gasoline futures had rallied 16.99cts or 12.3% to $1.5470 gallon. The previous high settlement on the spot continuous chart was reached during the summer driving season on June 23 at $1.6035 gallon, less than 10 days after US gasoline demand reached a weekly record high of 9.815 million bpd, per data from the Energy Information Administration.

During their biannual meeting in Vienna on November 30, OPEC agreed to a 1.2 million bpd cut in their production to 32.5 million bpd that takes effect January 1, with the agreement creating a surge in futures trading.

The Chicago-based CME Group reported single-day volume traded in Energy-Complex products on November 30 at a record high 4,510,408, well above the previous record of 3,932,201 contracts on February 11. NYMEX West Texas Intermediate futures volume spiked to 2,530,530 contracts, soaring past the prior record of 1,861,909 contracts set the day following the presidential election on November 9.

WTI futures with nearest delivery topped $50 bbl for the first time in nearly six weeks on December 1, rallying $5.82 or 12.9% in two sessions to a $51.06 bbl settlement, and could test resistance near $60 bbl in the coming weeks.

Volatility in oil futures is expected to increase further following the OPEC agreement, which cuts production for the first time in eight years. OPEC expects another 600,000 bpd in production cuts from non-OPEC members, with Russia reportedly agreeing to reduce output by 300,000 bpd.

The quota agreement has a six-month term, with OPEC to review its affect and market conditions in May 2017.

The market will closely watch OPEC members for cheating, with the cartel having a checkered past in complying with quotas. Also, the 32.5 million bpd production quota, the low end of a pledge made by members in Algiers on September 28, doesn’t include Indonesia, which suspended its membership, so the production cut is less dramatic than the headline number. Secondary sources report Indonesia produced 722,000 bpd of crude oil in October.

The agreement is nonetheless significant and seen aided by strong growth in oil demand from the United States. However, the upside in crude values is also expected to be limited, given ongoing excesses in global oil supply, with US commercial crude inventory at 488.1 million bbl on November 25, 30.9 million bbl or 6.8% more than the comparable year ago period, data from the EIA shows.

Moreover, US shale oil producers whom have already been reactivating rigs that helped boost domestic production to an 8.699 million bpd 5-1/2 month high during the Thanksgiving Day holiday week and 271,000 bpd above a 26-month low plumbed in the final days of the second quarter, are seen as benefactors of OPEC’s cut. Many more wells are seen economical with WTI at $55 to $60 bbl that would add oil to the market and slow the draw down in bloated inventory.

Gasoline economics are healthy in the United States amid ample crude supply and strong demand both domestically and for exports. Statistics from the EIA for September, the most recent monthly data available, shows U.S. refinery and blender net production of finished gasoline was 10.3 million bpd in September, 303,000 bpd above a year ago.

“Refinery output remains strong even in the late fall; the first two weeks of November had a net output of 10.5 million b/d and 10.2 million b/d, respectively, compared with output of 9.7 million b/d and 9.6 million b/d for the same weeks last year,” said EIA in a weekly report November 30.

After nearly 11 months, gasoline supplied to the primary market has averaged 9.394 million bpd, 250,000 bpd or 2.7% above the corresponding period in 2015. EIA shows gasoline exports averaged 564,000 bpd in September, up 208,000 bpd from September 2015, with 60% of the country’s gasoline exports that month sent to Mexico.

Another dynamic in a busy November for the oil market was an increase in the required amount of renewables in the transportation sector from a May proposal. On November 23, the Environmental Protection Agency finalized the 2017 Renewable Volume Obligation for the nested renewable fuel category which is overwhelmingly satisfied by conventional corn-based ethanol at the 15 billion gallon statutory level, 200 million gallons more than proposed in May.

Tradable D6 Renewable Identification Numbers, credits obligated parties under the Renewable Fuel Standard–refiners, importers and blenders–submit to the EPA to show compliance again spiked above $1, surging nearly 30cts or 38% from a mid-November low to $1.07 on December 1.

The blend wall, which refers to the 10% maximum ethanol content level in gasoline that can be used in all vehicles on US roads, remains an impediment in adding more ethanol to the gasoline pool even as the mandate to do so expands, spiking RIN values.

In a November 28 blog from consulting engineers Turner, Mason & Company, they project ethanol in the gasoline pool at 14.771 million gallon or 10.18% in 2016 compared to 13.59 million gallons or 10.16% in 2012.

“The percentage of ethanol in the gasoline pool has stayed remarkably constant over the past five years. The general conclusion is that the blend wall is still a limitation and demand for E15 and E85 has not grown significantly,” explain the consultants.

To learn more about Schneider Electric’s energy and commodity trading platform, DTN ProphetX click here.

Colonial Pipeline Explosion Spikes Gasoline Futures

Within minutes of taking over as the nearest delivered contract in the evening hour of October 31, December RBOB futures spiked 18.56cts or 12.8% to a five-month high on the spot continuous chart of $1.6351 gallon in trading on the New York Mercantile Exchange triggered by the second outage on the ever important Colonial Pipeline in less than two months.


A crew working on main Line 1, a massive 40-inch pipeline with a flow rate of 1.37 million bpd that transports gasoline, struck the pipeline with a track hoe and caused an explosion and subsequent fire. One worker was killed and five were hospitalized.

The accident occurred in Shelby County, Alabama, several miles away from a pipeline rupture discovered September 9 that shut Line 1 which later operated with restricted service for nearly two weeks through September 21. Roughly 252,000 gallons of gasoline leaked from the rupture, with Colonial constructing a 500-foot above ground bypass around the leak to restore full service. The bypass was set to be removed sometime between November 2 and 10.

Colonial Pipeline again shut Lines 1 and 2 October 31, with the latter a 36-inch pipeline that transports distillate fuels, including diesel, heating oil and jet fuel. Line 2 has a 1.16 million bpd flow rate. Both Lines 1 and 2 originate in Houston, Texas, and run in a northeast direction to Greensboro, North Carolina, the location of a tank farm and interconnection point on the Colonial system. From Greensboro, Line 3 runs to Linden, New Jersey, and Line 4 to Dorsey, Maryland, both 32-inch pipelines.

The Colonial Pipeline is a critical conduit for delivering refined fuels to states along the eastern seaboard, with the 2.5 million bpd 5,500 mile pipeline consistently running at or near full capacity, and connects 29 refineries and 267 wholesale distribution terminals. Refined fuels from the Gulf Coast are needed by states along the Atlantic Coast as well as imports because the region lacks sufficient refining capacity.

December RBOB futures would pare the advance as the November 1 session wore on, settling 6.46cts higher at $1.4841 gallon, dropping back nearly 6.5cts shortly after the noon hour as Colonial Pipeline said it had returned its main Line 2 to service and that it believed it would restore service on its main Line 1, which was still on fire at the time of the update, by November 5.

Nearest delivered RBOB futures traded in a 19.51cts range November 1, the widest spread since a 20.88cts daily range October 31, 2012 amid a selloff ahead of a contract expiration. A month prior on September 28, 2012, nearest delivered RBOB futures traded in a 29.51cts range amid a short squeeze ahead of contract expiration, trading that day in a $3.1307 to $3.4258 gallon range.

In bulk wholesale spot trading on November 1, cash differentials rallied 4.0cts gallon or more for gasoline in the New York Harbor to amplify the advance by futures, with spot prices ending the session a dime or more higher in anticipation supply would tighten. In contrast, cash differentials weakened 4.75cts or more for gasoline in the Gulf Coast region to limit the gain in spot price to less than 2.0cts gallon, with concern supply could get bottled up in the region.

The 13-day disruption in September triggered an 8.475 million bbl or 13.2% draw down in PADD 1 East Coast gasoline supply during the week-ended September 16 to a 55.535 million bbl 22-month low according to the Energy Information Administration, with the region’s gasoline supply reaching a 72.493 million bbl 26-year high on July 22.

The large supply cushion in September joined by a surge in waterborne imports muted a greater price response, although retail prices in the Southeast jumped 9cts gallon during the disruption, and some retail outlets ran out of fuel.

During the five weeks since September 16, East Coast gasoline supply has increased 7.34 million bbl to 62.874 million bbl. If Colonial can restore service on the main gasoline line by November 5, the price impact will be limited and RBOB futures have likely installed its high in response to the outage during the early moments of the November 1 session.

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