Posts by Hoekstra Trading LLC
RIN Price Nosedive — It WAS foreseen, it’s cause was COMPETITION, and it WILL continue
Was it foreseen? Yes. From January 2023, Hoekstra Trading clients were analyzing and acting on the growing gap between the D4 RIN theoretical value and its quoted market price. Starting in February, a series of 12 articles on renewable diesel supply was published by University of Illinois economists with quantitative supply/demand analyses and explanations of…
Read MoreWelcome to the Future – part 1 – sulfur credit investments pay off 10-fold for forward-looking refiners
Last month, the price of the Tier 3 gasoline sulfur credit hit a new high of $3,600 per credit, up by a factor of 10 from 2 years ago. This tradable credit allows refiners to sell gasoline that exceeds the 10 ppm sulfur specification on gasoline sold in the United States. In today’s blog, we…
Read MoreSREs = Sustainable Revenues for Expensive lawyers
Will it ever end? What’s the effect on RIN prices? What’s the cost? The acronym SRE is something you will see a lot if you follow the world of renewable fuels and Renewable Identification Numbers (RINs). SRE means Sustainable Revenues for Expensive lawyers. It involves a dispute about Small Refinery Exemptions granted during the Trump…
Read MoreAttractor – a RIN price model that accurately calculates RIN prices
Hoekstra Trading’s Attractor RIN price model is a spreadsheet that calculates the theoretical value of the D4 Renewable Identification Number (RIN) and enables the user to study theoretical vs. market RIN prices. The theoretical value is calculated using Hoekstra Trading’s spreadsheet application of the Irwin-McCormack-Stock (IMS) equation which is based on fundamental economic theory The…
Read MoreRIN price nosedive — Was it foreseen? What was the cause? Will it continue?
The question and answer segment of Darling Ingredients’ Nov 8, 2023 earnings conference call was dominated by questions about the outlook for renewable diesel margins. This focus was triggered by last quarter’s 50% D4 RIN price nosedive and a corresponding nosedive in Darling’s stock price as seen on the right hand side of this 2-year…
Read MoreHow did the RIN price nosedive affect stock prices?
The recent nosedive in the price of Renewable Identification Number (RIN) credits, from $1.60 to 80 cents, has financial analysts asking refining executives how falling RIN prices might affect their future profits. For example, from last week: How do you see the RIN dynamics impacting your renewable product sales margin considering the renewable volume obligation…
Read MoreA Reliable Attractor – C-Suites questioned on RIN price nosedive
Last week financial analysts asked refining executives about the nosedive in the D4 Renewable Identification number (RIN). From responses to this week’s questioning: Below are 3 excerpts, from Neste and Valero’s 3rd quarter earnings conference calls: 1. Question from Peter Low, Financial analyst, Redburn Atlantic Hi, thanks. Yes it’s one just on the D4 RIN.…
Read MoreHoekstra Trading “D4HT” theoretical RIN price
Hoekstra Trading’s “D4HT” value is the calculated theoretical price of a D4 RIN using an equation published by Scott Irwin, Kristen McCormack, and James H. Stock (IMS) in 2020. It is a theoretical, not an actual value, that is calculated using Hoekstra Trading’s best estimate of the values of the variables and parameters of the…
Read MoreTop 3 takeaways from the OPIS 2023 Conference
This year’s top 3 takeaways from Hoekstra Trading’s perspective: Recommendation Anyone with a stake in RINs pricing and economics should get Hoekstra Research Report 10 which includes this Hoekstra IMS RINs pricing spreadsheet that accurately calculates theoretical RIN prices, tracks them versus actual prices and predicts how RIN prices will change with the variables that…
Read MoreBaby the RIN Must Fall, Part 4 — D4 RIN Price Nosedives, Triggering a Flurry of Market Reactions
In late July, 2023, the D4 Renewable Identification Number (RIN) credit price started nosediving from $1.60 on July 25 to $1.00 on September 25. The D4 RIN is part of the regulatory system that sets and ensures compliance with mandates on the supply of renewable fuel components in diesel fuel in the United States. This…
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