The traditional U.S. driving season lasts from Memorial Day to Labor Day. It is associated with strong domestic gasoline consumption. Logic dictates, therefore, that gasoline refining margins should be comparatively healthy during the summer months. Reality, as the chart illustrates, is more nuanced. It shows the CME Group RBOB and Heating Oil crack spread values during the summer months over the past 10 years. Less than half of the time did RBOB cracks average above the Heat/WTI spreads.

The generic explanation for this seemingly unusual discrepancy is that U.S. refiners are always well prepared and ensure more than adequate supply for motorists during these peak months. A more specific reason is that, as clearly displayed in the graph, U.S. seasonal gasoline demand (and annual demand, for that matter) peaked in 2018. With the transition from fossil fuels to renewable energy underway – however slow – it is unlikely that demand will surpass that summit reached seven years ago. Thirdly, and particularly in 2022 and 2025, it was not relative gasoline weakness but distillate strength that pushed the Heating Oil crack above its RBOB peer, in both years due to fears of perceived and actual supply disruptions from Russia.

The 2026 summer curve follows the 2022 and 2025 patterns. The snapshot taken on September 18 strongly suggests Heating Oil will remain considerably stronger than RBOB, likely due to the combination of the factors mentioned above: refinery preparedness, tepid gasoline consumption and counter-seasonal distillate strength.

The market’s inclination to favour Heating Oil over RBOB to the extent seen this year, as reflected in the crack spread values, may nonetheless be mistaken. The U.S. administration’s steps to remove EV subsidies and ease fuel economy standards could lead to stronger-than-expected gasoline demand next year. Additionally, the reconfiguration of several U.S. refineries to maximise diesel yields at the expense of gasoline could create shortfalls in domestic supply. While it may be improbable to expect the CME Group RBOB contract to outperform Heating Oil during the summer of 2026, the premium RBOB commands over WTI for the June – August period of 2026 appears cheap compared with that of Heating Oil.