Archive for May 2021
New gasoline specification is increasing gasoline prices
As gasoline demand increases, a new specification is increasing gasoline prices. The specification, called the Tier 3 Standard, limits gasoline sulfur to 10 ppm maximum versus the previous (Tier 2) 30 ppm limit. The Tier 3 Standard was enacted in 2014 and phased in starting in 2017, with full implementation in 2020. Now is the…
Read MoreUnderstanding RIN Price Fundamentals
It has been proven the pricing of D4 RINs follows basic economic and asset pricing theory. In 2020, the theory was cast in the form of a mathematical model by professors from the The University of Illinois and Harvard University. Hoekstra Trading implemented their model, which I call the IMS model (IMS is an acronym…
Read More