Fitch Solutions Country Risk & Industry Research has revealed its latest NYMEX RBOB gasoline price forecasts in a new report sent to Rigzone on Thursday.
According to the report, the company sees the commodity averaging $2.70 per gallon in 2023, $2.38 per gallon in 2024, $2.34 per gallon in 2025, and $2.24 per gallon in 2026. A Bloomberg Consensus highlighted in the report projected that the commodity will hit $2.79 per gallon this year, $2.86 per gallon in 2024, $2.50 per gallon in 2025, and $2.31 per gallon in 2026. Fitch Solutions’ report forecast that the NYMEX RBOB gasoline price averaged $2.95 per gallon in 2022.
“Prices are expected to remain elevated compared to historical levels however decline from 2022 records,” Fitch Solutions stated in the report.
“Total gasoline demand will grow by 1.2 percent year on year in 2023, however the trend in gasoline consumption among the developed (DMs) and emerging markets (EMs) will diverge in 2023,” the company added.
“Motor gasoline consumption is expected to remain stable in DMs as the impacts of economic slowdown are balanced by the effect of a lower price of fuel and slowing inflation. At the same time, the gasoline consumption growth will accelerate among the EMs from 2.2 percent year on year in 2022 to 2.5 percent year on year in 2023, driven primarily by the China reopening,” the company continued.
In the report, Fitch Solutions noted that total gasoline production will grow by 1.9 percent year on year in 2023, “up from 1.5 percent year on year growth in 2022”.
“The acceleration in gasoline production growth will support price declines. Despite the production growth, the global market is expected to remain slightly undersupplied in 2023 which will keep prices elevated above historical levels,” Fitch Solutions stated in the report.
“Low but growing gasoline inventories will support elevated but declining levels of gasoline prices in 2023 … Over the medium-term, gasoline prices are set to decline … supported by fundamentals as the global balance switch to oversupply next year,” Fitch Solutions added.
RBOB and Retail Prices
The oil and gas team at Fitch Solutions has previously highlighted to Rigzone that the relationship between RBOB and retail prices is useful for directional trends as well as volatility. Retail prices are a mix of taxes, local blending requirements, profit margin, and delivery costs, as well as other factors, and retailers purchase supply at varying amounts from both spot and futures contracted volumes, the Fitch Solutions team outlined to Rigzone back in 2022. RBOB, being the only widely traded spot and futures contract, provides a good proxy for future pricing trends and the ability to secure supply at a fixed price as the contracts are physical, the team said at the time.
In its latest short term energy outlook, which was released this month, the U.S. Energy Information Administration projected that the retail gasoline price would hit $3.39 per gallon in 2023 and $3.10 per gallon in 2024. The STEO highlighted that the retail gasoline price came in at $3.97 per gallon in 2022.
As of February 17, the price of regular gasoline in the U.S. is $3.421 per gallon, according to the AAA gas prices website. Yesterday’s average was $3.422 per gallon, the week ago average was $3.431 per gallon, the month ago average was $3.327 per gallon, and the year ago average was $3.522 per gallon, the AAA site outlined.
To contact the author, email andreas.exarheas@rigzone.com
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