RB · Energy / Product Spread
Z100308 – [RB] RB-HO Crack Spread Signal
RBOB gasoline versus heating oil crack spread z-score captures the inter-product seasonal spec premium regime and transmits summer-gasoline-tightness versus winter-distillate-tightness signals to RBOB via the crack-spread channel.
At a glance
Current reading
-0.972
Signal state
RB Mild Discount
77 days in Stress phase
Updated
Nov 06, 2026
NYMEX RB + HO daily
Sample
20-year window
Daily cadence; 2005 onward
As of Nov 06, 2026. Updated nightly.
SIGNAL OVERVIEW
The RBOB-HO spread is the classic inter-product spread between gasoline and heating oil. Summer driving season drives gasoline above heating oil (RB rich); winter heating demand reverses the spread (HO rich). When the spread z-score runs well above its seasonal norm, the signal detects an elevated summer gasoline spec premium or a distillate-weakness episode; when below norm, winter distillate tightness dominates. The signal takes RB minus HO front-month, z-scored on rolling and tanh-bounded. The empirical phase pattern (see regime table) shows Phase +1 (RB rich to HO) delivers -4.50 pp edge on 42 percent sample; Phase -1 (RB cheap to HO) delivers +4.33 pp on 45 percent sample. 8.83 pp spread via the crack-spread channel.
LIVE CHART
RB-HO Crack Spread Signal
What the chart is showing right now. The dark line is NYMEX RBOB front-month minus NYMEX Heating Oil front-month, z-scored and tanh-bounded. Positive composite means spread running above seasonal norm (RB rich to HO); negative means below norm (RB cheap to HO). The bronze line in the middle panel is NYMEX RBOB Gasoline front-month continuous. The bottom panel tracks the trailing 252-day Spearman information coefficient.
COMPOSITE
-0.972 / tanh
STATE
RB Mild Discount
PHASE
-2.07
PHASE +1 EDGE
-4.50 pp
PHASE -1 EDGE
+4.33 pp
TODAY’S PLAYBOOK READING
STATE
RB Mild Discount
STATE AND HISTORY
RB-HO spread signal firing at composite -0.972, 77 trading days running in current phase. Phase +1 delivers minus 1.60 percent RBOB fwd60d; Phase -1 delivers plus 7.23 percent.
THE SPREAD MECHANISM
RBOB gasoline and heating oil share crude input but differ by product season. Summer driving season drives gasoline above heating oil; winter heating demand reverses the spread. Spread above seasonal norm signals elevated gasoline premium; below norm signals distillate tightness.
HOW TO POSITION
Inter-product crack overlay for RBOB. RB-rich firings warn of gasoline-tight regime and bullish setup. HO-rich firings confirm distillate-tight regime. Pair with retail gasoline premium, gasoline demand, and crude signals for stacked product-plus-fundamental conviction.
WHAT THE CHART SHOWS
The composite sits at -0.972 in the current band. RB-HO spread signal reading in current regime through late 2026.
TOP INPUTS FIRING
- Primary composite -0.972 State RB Mild Discount, 77 days running in current phase.
- RB minus HO front-month z-score Raw z-score -2.07; daily RB close minus HO close z-scored on rolling window.
- 8.83 pp spread, crack-spread channel Phase +1 edge -4.50 pp on 42 percent sample; Phase -1 edge +4.33 pp on 45 percent sample via crack-spread channel.
THE TAKEAWAY
What this means for you today
THE SPREAD CALL
Composite -0.972, current state RB Mild Discount. RB-HO spread signal reading in current band through late 2026. Phase Stress firing for 77 trading days.
THE EMPIRICAL CONTEXT
Phase +1 (RB rich) edge -4.50 pp on 42 percent sample. Phase 0 (Neutral) edge -0.37 pp on 13 percent sample. Phase -1 (RB cheap) edge +4.33 pp on 45 percent sample. 8.83 pp spread.
THE HONEST CAVEAT
The RB-HO spread has strong seasonal pattern (RB summer premium, HO winter premium) which the z-score partially normalizes but does not eliminate. Signal captures deviation from seasonal norm not absolute spread level. Both products share crude as input so the spread can be dominated by crack-wide dynamics not inter-product imbalances. Daily IC not individually significant on all sampling windows.
THE REGIME MAP
The three phases, RBOB forward returns and sample share
Regime table captures phase-conditional edges on RBOB forward 60-day returns from live-window trading days. Phase +1 minus Phase -1 spread via the crack-spread channel.
| State | Phase | Share | Fwd 60d | HAC t | Edge vs baseline | Last firings |
|---|---|---|---|---|---|---|
| RB rich to HO | +1 | 41.6% (3753 d) | -1.60% | -4.50pp | Jun 2026, Mar 2025, Mar 2024 | |
| Spread neutral | 0 | 13.3% (1204 d) | +2.54% | -0.37pp | May 2026, Feb 2026, Jun 2025 | |
| RB cheap to HO TODAY | -1 | 45.1% (4065 d) | +7.23% | +4.33pp | Jul 2026, Mar 2026, Jul 2025 |
The historical pattern
Signature episodes in the 20-year sample
What this measures
RBOB-HO spread above seasonal norm reflects elevated summer gasoline spec premium or distillate weakness and transmits bullish to RBOB; spread below norm reflects winter distillate tightness and transmits bearish to RBOB. Front-month RB minus front-month HO z-scored and tanh-bounded captures that regime. Target NYMEX RBOB Gasoline front-month continuous.
Why it matters
Why RB-HO crack spread matters for RBOB
RBOB gasoline and heating oil are the two largest refined products on NYMEX; both share crude as input with refineries producing variable product mixes. The RB-HO spread captures the inter-product seasonal spec premium; summer driving drives gasoline above heating oil, winter heating reverses. When the z-scored spread runs well above seasonal norm, elevated gasoline premium reflects tight gasoline supply or weak distillate; bullish pressure transmits to RBOB via the crack-spread channel. When below norm, winter distillate tightness compresses RBOB. Petroleum trading desks watch RB-HO alongside individual product crack spreads as a top-of-book inter-product gauge.
How to use this signal today
Inter-product crack overlay for RBOB via RB-HO front-month spread z-score. RB-rich firings warn of gasoline-tight regime with the 2022 gasoline spec premium peak and 2020 COVID jet-fuel collapse spillover as canonical Phase +1 anchors. HO-rich firings confirm distillate-tight regime with the 2014 polar vortex distillate squeeze as canonical Phase -1 anchor. Pair with CA retail premium (regional companion), gasoline demand YoY, crude signals for upstream feedthrough, and PADD3 refinery input for stacked product-plus-fundamental conviction.
Risk overlay
Three limitations. First, the RB-HO spread has strong seasonal pattern which z-score partially normalizes but does not eliminate; large seasonal transitions (May to June, October to November) can produce signal volatility reflecting calendar not fundamental change. Second, both products share crude as input so the spread can be dominated by crack-wide dynamics (both products rising or falling together) not inter-product imbalances. Third, distillate market is also driven by jet fuel + heating oil separately; non-HO distillate dynamics can decouple from the RB-HO pair. Daily IC not individually significant on all sampling windows.
Signal consumers and siblings
Not investment advice · The analysis on this page is informational and educational. Signal readings, historical case figures, and empirical statistics are derived from publicly available data and are provided without warranty. Hypothetical performance results have inherent limitations, including the benefit of hindsight. Readers who intend to trade should consult a licensed investment professional and see the research brief for the full disclaimer.
Last refreshed Nov 08, 2026 12:57 PM ET