Anatomy of the IMS RINs pricing model

By Hoekstra Trading LLC | October 31, 2021

Anatomy, [ə’nadəme] noun – a study of the structure or internal workings of something The Irwin McCormack Stock (IMS) RINs pricing model is based on fundamental economic and asset pricing theory and has been proven to accurately model real-world D4 RIN prices. In 2020, Hoekstra Trading implemented it in a spreadsheet for use in analyzing,…

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Phillips 66 3Q 2021 refining margin is still way low

By Hoekstra Trading LLC | October 29, 2021

Today Phillips 66 (PSX) reported a realized refining margin of $8.57/barrel versus a market benchmark margin of $19.44/barrel. The ratio, called “market capture”, was $8.57/$19.44 or 44%: The data and calculation are shown nicely on this chart which PSX provides each quarter in their earnings conference call: The $8.57 per barrel realized margin was an…

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US gasoline pool was 8 ppm sulfur in 2020

By Hoekstra Trading LLC | October 24, 2021

We now know the complete story of the six year approach to 10 ppm sulfur gasoline in the United States. The headline 2020 number of 8 ppm is good news for regulators because it proves the feasibility of a safe landing at or below 10 ppm: It looks a bit more like a helicopter landing…

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Stock investors — watch 3rd quarter refining margins

By Hoekstra Trading LLC | October 20, 2021

Investors and analysts are confused about how to interpret low refining margins being reported this year. My theory is the low margins indicate a fundamental weakness in the performance of many US refineries which is inability to make enough on-spec gasoline from crude; and that weakness was triggered by the Tier 3 ultra-low sulfur (10…

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