Posts by Hoekstra Trading LLC
Release of Hoekstra Research Report 11: The Tax-and Subsidize Interpretation of RINs
To order this report including 6 months of unlimited consultation by phone and E-mail please issue a purchase order using information in the Offer letter or contact George.hoekstra@hoekstratrading.com +1 630 330-8159 The tax-and-subsidize interpretation of RINs By George Hoekstra / Hoekstra Trading LLC / 1 Contents 2 Summary. 2 3 The RIN as a tax. 5 3.1 …
Read MoreSurging sulfur credit prices
The price of Tier 3 sulfur credits has quadrupled in recent months as refiners scramble to balance the books on their obligation to meet the 10 ppm gasoline sulfur mandate on gasoline sold in the U.S. in 2022. Some refiners are making last-minute adjustments to reduce their gasoline sulfur in the 4th quarter — these…
Read MoreHow the Tier 3 gasoline sulfur mandate is handcuffing U.S. gasoline production
While the stock market, crude oil, fuel prices, and cryptocurrencies have gone up and down wildly, the price of one important commodity has been quietly going straight up for years. That commodity is octane. Figure 1 shows that the retail price of octane, measured by the difference between the pump prices of premium gasoline and…
Read MoreEnd the moratorium on investment in conventional (not renewable) fuels refining
Biden ideas to reduce fuel prices: Ban exports = BAD IDEA Windfall tax = BAD IDEA End moratorium on investment for conventional (not renewable) clean fuels = GREAT IDEA Question from Petroleum Quarterly Technology, 4Q2022 issue: In view of the recent wave of refinery closures, including five in the US during 2021…
Read MoreNEWS 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?
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 used to certify compliance with the…
Read MoreThe Big Bang Theory Part 1 – The surprising RIN price spike of 2013
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 corn-based ethanol into refined gasoline to…
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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