RBOB futures plunges to all-time low as more states issue shutdowns

New York — NYMEX RBOB futures settled sharply lower Monday as demand outlooks dimmed after more US states issued "stay-at-home" orders to slow the COVID-19 outbreak.

April RBOB settled 19.36 cents lower at 41.18 cents/gal, plunging 32% from Friday's close to notch a fresh all-time low.

The number of states asking non-essential businesses to shutter and their workers to remain home jumped to at least 13 on Monday. Massachusetts, Ohio, Indiana, Michigan, and New Jersey, among others, issued stay-at-home orders Monday, joining California, New York and Illinois, which issued orders late last week.

Refining margins are turning negative on the drop in gasoline demand and global refiners began to cut runs to meet the lower demand and delayed planned work to manage the spread of COVID-19.

The front-month ICE New York Harbor RBOB crack versus Brent fell to minus $5/b Monday.

On the US Atlantic Coast, Phillips 66 cut rates at its 258,000 b/d Bayway refinery in Linden, New Jersey, by as much as 20%, while Delta Air Lines' 190,000 b/d Trainer, Pennsylvania, refinery began running at 150,000 b/d this weekend.

Nearby, at PBF's 180,200 b/d Delaware City, Delaware, plant, the company shifted the product yield to maximum distillate yield to cut back on gasoline output.

European refiners also reported they were cutting rates on lack of demand and falling margins. ExxonMobil's French downstream subsidiary Esso SAF said Monday throughput at its two French refineries, Gravenchon and Fos, has been reduced "to adapt to the decreasing French demand during the COVID-19 pandemic."

The rest of the crude slate edged higher Monday, supported by a weakened dollar after the US Federal Reserve announces an open-ended asset purchase commitment.

NYMEX May WTI settled up 73 cents at $23.36/b, and ICE May Brent was up 5 cents on the day at $27.03/b. NYMEX April ULSD settled 98 points higher at $1.0161/b.

Fed makes moves

The US central bank said early Monday it had committed to unlimited purchases of US Treasuries and agency mortgage-backed securities, as well as the setting-up of additional lending tools to shore up struggling companies and financial markets. Crude futures initially reacted bullishly to the news, but soon retreated as US equity markets tanked.

The news did send the US dollar slightly lower, adding upward pressure to crude prices, which are typically inversely related.

"The action by the Fed was a game changer with the outlook for the US dollar and commodity prices across the board will see some relief," OANDA senior market analyst Edward Moya said.

Front-month ICE US dollar index futures were trading at around 130 at the close of oil trading, down from 103.502 on Friday. The index was still at the strongest since 2003, and continued dollar strength is likely to present headwinds to a near-term recovery in crude prices.