Energy Prices Overview

Spot, Rack & Retail Market Segments Explained

OPIS provides energy pricing for the downstream fuel market, which includes three segments tied to different points on the fuel supply chain. But what exactly is the difference, and how do you know which segment applies to your business?

The Spot Market
The NYMEX futures or “paper” market is the most influential factor in increases or decreases of oil commodity pricing. Oil futures affect spot markets, then rack markets, then ultimately retail markets where the consumer sees an increase or decrease in the price they pay at the gas pump. Few actual barrels change hands at the futures level; it is a paper market on which contracts for the value of a commodity are bought and sold.

The spot market, sometimes called the “bulk” market, is where physical products change hands. It is the point where prices for physical gasoline, diesel, jet fuel, gas liquids, petrochemicals, coal, metals and other commodities are assigned, with price fluctuations often seen in-line with futures market moves. Spot transactions are large deals – not truck quantities. Spot fuel purchases are traded either on a pipeline or on the water via barge or cargo. For example, an oil refiner sells diesel to an end-user or fuel retailer to put into a storage tank.

The U.S. spot markets are Gulf Coast, Gulf Coast Waterborne, NY Harbor Barge, NY Harbor Cargo, Buckeye, Laurel, Boston, Group 3, Chicago, Los Angeles, San Francisco and Pacific Northwest.

Learn more about spot pricing products.

The Rack Market
Rack is the common industry term for the wholesale fuel market. Wholesale physical fuel is purchased at fuel terminals,  sometimes located off an oil pipeline. Fuel is then picked up from the rack, usually by truck, and delivered to the end-user (example: a fleet) or for resale (example: a gas station).

OPIS wholesale gasoline and diesel pricing is benchmarked in the U.S., meaning it is the standard price reference for wholesale fuel transactions and supply contracts. You are most likely billed on an OPIS price if you own a gas station, source fuel for a fleet or are bidding for municipal fuel and are being charged for wholesale fuel costs by a supplier (often called a ‘jobber’ or ‘marketer’).

Learn more about rack pricing products.

The Retail Market
The retail market is probably the easiest to identify. This applies to retail stations, be it the local gas station around the corner, the branded station with a busy convenience store or the “big box stores’ such as Walmart, Sam’s Club, Wawa, Costco, etc.

Retail pricing focuses on competitor prices and comparison – what are the stations closest to you charging? What brands sell the most fuel in your local market? OPIS tracks retail profits and margins, volumes, brand power and market share to help retailers measure their station’s performance and strategize new ways to increase sales and cut costs. OPIS also provides news and insight on boosting convenience store sales.

Learn more about retail pricing products.