RBOB Gasoline Intelligence Report

RBOB gasoline at $3.2375/gal has followed WTI higher (+29% from Jul 6 low of ~$2.50) as the US-Iran peace deal collapsed and Hormuz re-closed, driving crude input costs sharply higher. But gasoline has its own distinct dynamics: inventories are below the 5-year average, the Sep 1 grade switch will deliver a structural $0.20-0.30/gal decline, and the crack spread remains elevated but faces correction risk. RBOB rose roughly in line with crude over the past two weeks, reflecting the pass-through of higher feedstock costs. The bull case (further Hormuz escalation pushing RBOB above $3.50) has ~25% probability. The central case (grade switch in Sep reducing to $2.80-3.00) is the highest-weight scenario at 40%. Buyers should DEFENSIVE: lock near-term volumes but structure Q4 contracts to capture the grade-switch discount.