Posts by Hoekstra Trading LLC
The 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
See the other posts in this series, Top 3 Takeaways: 2021, 2022, 2023, 2024 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…
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…
Read MoreHere’s how to reduce RIN costs by 25%
On December 14, 2021, Hoekstra Trading notified our clients of a RIN credit spread trading opportunity which is indicated by the gap between the dark green and light green data points on the right side of this chart: The opportunity was to sell the 2021 (light green) D4 RIN and buy the 2022 (dark green)…
Read MoreRIN Fundamentals — 20 FAQs
Recommendation Anyone with a stake in RINs pricing and economics should get Hoekstra Research Report 10 which includes the Hoekstra ATTRACTOR spreadsheet spreadsheet that accurately calculates D4T, the theoretical RIN price, tracks it versus quoted market prices, and predicts how RIN prices will change with the variables that affect them. Why not send a purchase…
Read MoreSecretary of Energy, oil CEOs discuss relaxing sulfur specs?
In Valero Energy’s earnings conference call yesterday, analyst Jason Gabelman asked about the June 23, 2022 meeting between refining executives and U.S. Energy Secretary Granholm on the possibility of fuel export bans and ways to increase domestic gasoline supply and reduce price. Here is an excerpt: Jason Gabelman, Director, Cohen All right. Were there any…
Read MoreA RIN is a tax and a subsidy that forces renewables into fuels Part 4 – A new perspective on RINs – the tax-subsidy interpretation
Summary This is a four-part blog series describing the renewable identification number (RIN) as a tax (part 1) and a subsidy (part 2) that forces renewables into fuels (part 3). This is part 4 showing how this tax-and-subsidize interpretation resolves the apparent contradiction at the core of the legal dispute over RINs which is now…
Read MoreA RIN is a tax and a subsidy that forces renewables into fuel Part 3 – How do RINs force renewables into fuel?
Summary This is a four-part blog series describing the renewable identification number (RIN) as a tax (part 1) and a subsidy (part 2) that forces renewables into fuels (this part 3), and how this tax-and-subsidize interpretation resolves the apparent contradiction (part 4) at the core of the legal dispute over RINs now in its 10th…
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