Prices are per gallon
As we can see in the both latter graphs, the seasonality is the main explanation of the curve which remain the same every year. In fact, during the beginning of the year the gasoline market structure is systematically on contango, which indicates the traders to stock, and then comes the “harvest” which represents the moment when the gasoline supply is more important and makes decrease the price. We also found out that the quality of gasoline during the summer is more exigent and more expensive because it requires “carry a lower Reid Vapor Pressure (RVP), a common measure of the volatility of gasoline.” (Reuters, March 2018)
Prices are per metric ton
On contrary the diesel curve is not annually seasonal as the gasoline. If we compare the forward curves of the last year with this one in course, we can see that the 2017 curve it is on contango but this year the forward curve is on backwardation. In our opinion, it could be related to the declining diesel promotion as motor companies like Toyota, for example, which is planning to cut diesel vehicles production and European countries which are decreasing and taxing their diesel consumption and demand.
Diesel and Gasoline prices are directly correlated.
In this graph we can see how the gasoline prices are compounded and the evolution during the last five years. As we see the prices declined from 2015 and it is mainly due to the crude oil price that dramatically decreased because of the opposition on the market between the US with their shale oil and the OPEC with its conventional oil. As the crude oil price is correlated with the gasoline price, this latter has also been impacted.
Here are the gasoline and diesel price components in details
Gasoline and blockchain
On April 2, it was announced that China has successfully used blockchain technology for a shipment of gasoline from China to Singapore. Sinochem made a deal with other traders, including Louis Dreyfus and ING. It was the first time that blockchain applications have been applied to all participants in the commodity trading process. Sinochem stated that by using digital B/L and smart contracts, the financing and transaction costs have decreased from 20% to 30%.
Traders and Sonangol
Sonangol, the state owned company of OPEC member Angola, has put an end to the deal they had with Trafigura, who supplied them with diesel and gasoline. Although Angola is the second producer of crude oil (1.632m bbls per day) behind Nigeria (2.14m bbls per day), they only have one refinery, and must rely on suppliers to get refined products. Now, they entered into a deal with Total and Glencore, with the former delivering gasoline, and the latter Diesel.
Glencore forms energy
The company Glencore is forming an alliance with China’s Zhejiang Petroleum to trade energy products. The purpose of this alliance is to have a foot on the Chinese market to be able to import petroleum products and exchange them.
This association will be located in a free trade zone and will be located in Zhoushan Free Trade Zone in eastern Zhejiang province.
Each company will invest 1 billion yuan, (157 million dollars), with Zhejiang holding a 71 percent share and Glencore the remainder.
This alliance follows the alliance between China National Chemical Corp, known as ChemChina, and Swiss-based trader Mercuria expanded an equity tie-up, to be able to gain access to the largest markets for energy consumption. (China)
References
http://marketqview.com/forwardcurvechart.php?ID=83&TYPE=Price
https://www.eia.gov/petroleum/gasdiesel/
https://www.eia.gov/outlooks/steo/report/us_oil.php
http://marketqview.com/forwardcurvechart.php?ID=39&TYPE=Price