Continued weakness (contango) in structure through Oct while Oct/Dec is still in backwardation makes trading gasoil quite difficult in weak demand markets. Gasoil prices have traded down to $696/MT but have yet to close below $700 while Heat cracks on screen hovers around $24/brl which is still quite reasonable and should insure ample supplies. BOGO is now trading below +$200/mt while cash premium for FAME trading at $150/mt (+356). Gross margin in NorthWestEurope for FAME not impressive at barely $30/mt while for RME (winter Bio) we are looking slightly better at $82/mt. Spread between HVO class 2 and UCOME remains at a premium of $162/mt while UCOME gross margin basis pricing of$1302 is at $212/mt. Political pressure in both in EU and US continues against UCO imports but August doldrums have set-in. This UCO issue will be back on agenda in Sept on both sides of the Atlantic. D4 RINs in US are lower at 0.567 reflecting solid production but now facing weaker demand. LCFS (Low Carbon Fuel Standard) credit bank situation although with delayed data is a good reflection of overall US situation - exceeding RVO (Renewable Volume Obligations). This writer still feels D4 RINs remain quite elevated and could face some early pressure in Q4.
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