Why has RBOB gasoline fallen to 3.05, down 10.2% in a month?

RBOB gasoline is $3.05 a gallon today, down 10.2% over the past thirty days. A month ago the same benchmark touched 3.761. The obvious read is that crude got cheaper and pulled every product down with it, and if that held, the answer would be short. So I checked the other products first.

Diesel did not follow. U.S. diesel is $5.652 a gallon, up 6.4% over the same thirty days, and that 5.652 is its high for the month. Gasoline and diesel come off the same barrel of crude. If a falling crude price were doing the work, diesel would be down too, and it is up and at its peak. Whatever pushed gasoline lower did not touch diesel, or something else pushed diesel the other way hard enough to cover it. Either way, the easy crude answer is gone.

Diesel's move is coming from Russia, where Ukraine has been hitting refineries through August. The reporting is heavy and consistent: strikes on the Kirishi refinery in the Leningrad region, described as Russia's second-largest by capacity, plus others across four regions. One account counts a record 21 drone strikes on Russian refineries in August, with refining averaging 3.8 million barrels per day, called the lowest in over two decades, and a 23% drop in diesel production. Moscow extended its ban on diesel and marine fuel exports by producers until Sept. 30. When a large exporter pulls diesel off the world market and its own output is down, the distillate that clears elsewhere gets bid up. Diesel at its thirty-day high fits that. Gasoline down 10.2% does not. The same reporting notes a 20% drop in Russian gasoline supplies, which if anything argues for firmer gasoline, not softer. So the war explains the diesel move and works against the gasoline move.

That sends me back to the U.S. side for gasoline. U.S. petroleum inventories are 428.91 million barrels, up 6.0% over thirty days. More barrels in storage is downward pressure on the product price, and the timing lines up with the calendar. It is late August. The summer driving season, the stretch that pulls the most gasoline through the pump, is ending. Demand eases into fall and inventories build, and gasoline is the product that feels that turn first. A price that ran to 3.761 at the peak of driving season and is now 3.05 as the season closes and stocks build is behaving the way gasoline usually behaves this time of year. I did not find a supply shock on the gasoline side. What I found is the ordinary seasonal roll plus a fuller tank.

The crack spread agrees. The 3:2:1 crack spread is 61.49 spread points, down 10.37 over thirty days. That spread is roughly what a refiner earns turning crude into gasoline and diesel, weighted toward gasoline. It fell over the month, and the biggest moving piece under it is gasoline losing 10.2% while diesel gained. Diesel alone would have lifted the spread. Gasoline pulled it down by more, so the net is lower. The spread fell even with diesel up because the gasoline loss was larger than the diesel gain.

So the honest answer to the question is two answers, because two different things are moving. Gasoline fell on its own domestic story: driving season winding down and U.S. inventories up 6.0%, ordinary end-of-summer softening rather than anything coming out of the war. Diesel rose on the war. Russian refining is down and the distillate that clears elsewhere is being bid up. They share a barrel of crude and they are pointed in opposite directions this month because the pressure on each is coming from a different place. I am confident about that split. What I cannot tell you from this data is how much of the gasoline drop is season and how much is the inventory build, because both are pushing the same way and I do not have the demand read to separate them.

For an operator, the split is the useful part. A retailer buying gasoline wholesale is paying less than a month ago, and if the street price lags the wholesale drop the way it often does going into fall, gasoline margin at the pump could hold up for a while even as the board price falls. That is a normal, earned margin on the downswing, and it belongs to the operator who carries the inventory risk. Diesel is the opposite trade. The diesel retail-wholesale spread is 1.384 now, wider by 0.183 over thirty days, so street diesel margin is fatter than it was even as the wholesale cost climbs to 5.652. A marketer heavy on diesel is having a good month on both the cost pass-through and the spread, and has earned it in a market being jerked around by strikes an ocean away. The risk sits on the buyer who has to keep diesel tanks full while the export ban holds, because the wholesale number could keep climbing as long as Russian distillate stays off the market, and how long that lasts is not clear.

If I had to name the one thing to watch, it is diesel, not gasoline. Gasoline is doing a seasonal thing that mostly resolves itself. Diesel is tied to a supply story with a date on it, Sept. 30, set by Moscow, and that date could move.

And that was just the data. See you tomorrow.