Over the five days ending April 25, the price of the front month futures contract for Brent crude, a proxy for the global price of light sweet crude grades not subject to transportation bottlenecks, averaged $118.55 per barrel, a $7-per-barrel decline from its average over the March 9 - 14 period when prices were at their highest level for 2012. Although lower than their peak in mid-March, prices are still well above their level at the start of the year. Also, the market remains backwardated, with front month prices over the five days ending April 25 about $5 per barrel above those for delivery 12 months in the future. Although backwardation has eased since the end of February, when the price difference between the front month and 12-month contracts was $7.69 per barrel for the five days ending February 27, the continuing premium on contracts for near-term delivery is still indicative of tightness in world oil markets.
Reformulated blendstock for oxygenate blending (RBOB) prices have been generally rising over the past two months, although they began to decrease in recent weeks. Comparing the 5-day periods ending February 27, 2012 and April 25, 2012, the price of the front month of the NYMEX RBOB contract, which calls for delivery in New York Harbor, rose from $3.11 per gallon to $3.16 per gallon. During March and April, the average price for the front month of the RBOB futures contract was $3.31 per gallon, $1.09 per gallon higher than the average front month price over the three-year period from 2009-2011, and $0.17 per gallon higher than the March and April 2011 average. It should be noted that some of the increase in RBOB futures prices over the last 60 days is due to the switch from winter-grade gasoline to more expensive summer-grade gasoline.