Archive for October 2022
NEWS FLASH – Valero says the Tier 3 gasoline sulfur spec is constraining US gasoline supply and increasing gasoline price
In this morning’s 3rd quarter earnings conference call, Valero executives were asked about possible steps to increase U.S. gasoline supply and reduce gasoline price. Their answer confirms Hoekstra Trading’s predictions that the Tier 3 gasoline sulfur specification is causing reduced gasoline supply and high gasoline prices in the US. Here is that Q&A: Connor Lynagh,…
Read MoreThe Big Bang Theory Part 2 – Could there be more RIN price explosions?
See Part 1 of this series In 2013, the price of the D6 Renewable Identification Number (RIN) spiked from a low of one cent in 2012 to over one dollar per RIN in July 2013. It is hard to find such a spectacular price move in the history of major commodity trading. RINs are credits…
Read MoreThe Big Bang Theory Part 1 – The surprising RIN price spike of 2013
See Part 2 of this series Renewable Identification Numbers (RINs) are credits used to certify compliance with the Renewable Fuel Standard (RFS) which requires certain minimum volumes of biofuels to be blended into fuels sold in the United States. RIN credits come in different categories. One category, code named “D6”, applies to the blending of…
Read MoreThe 2022 OPIS Biofuels conference – my top 3 takeaways
The OPIS 14th Annual RFS, RINs & Biofuels Forum brought some marquee names in the renewable fuels world to the platform and drew 200+ delegates to Chicago in September 2022. This annual conference is a good way to keep aware of happenings in the biofuels industry. Here is the countdown of my top 3 takeaways…
Read MoreU.S. retail octane value hits all-time high
The retail value of octane, which has been increasing relentlessly, hit another all-time high of almost $0.15 per octane-gallon at the end of September. In units more familiar to refinery engineers, that’s $6.30 per octane-barrel! Much has been written about the causes of the increase. Hoekstra Trading attributes it to the $10 billion/year of octane…
Read MoreThe octane-sulfur squeeze continues to constrain U.S. gasoline production and refining profits
An “octane-sulfur squeeze” is occurring in 2022 because refiners are desulfurizing gasoline more severely than in the past to comply with the new Tier 3 gasoline sulfur specification (10 ppm sulfur max). Higher desulfurization severity is reducing gasoline octane much more than refiners had been expecting which is causing product downgrades and lower production of…
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