Posts by Hoekstra Trading LLC
Anatomy of the IMS RINs pricing model
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,…
Read MorePhillips 66 3Q 2021 refining margin is still way low
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…
Read MoreUS gasoline pool was 8 ppm sulfur in 2020
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…
Read MoreStock investors — watch 3rd quarter refining margins
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…
Read MoreFeedstock modeling for gasoline desulfurization
In Houston this week? Learn how refiners are using 21st Century analytical methods to make more high octane, low sulfur gasoline, at the Gulf Coast Conference. https://www.gulfcoastconference.com/presentationProfile.php?pid=7387&y=2021&r=bio&rid=7387
Read MoreTime to regroup on RINs
The refining industry has little to show for its investment in the 8-year battle to get relief on RIN costs. Though Big Oil is my career home, and refiners are my prime target customers, I must admit we seem over matched in this battle. It’s a familiar feeling for a fan of the Chicago Bears,…
Read MoreThe 2021 OPIS conference and the biofuels contradiction
See the other posts in this series, Top 3 Takeaways: 2021, 2022, 2023, 2024 Any engineer attending a biofuels conference will notice an atmosphere filled with lawyers, accountants, lobbyists, and RINs traders. It is an interesting and educational but unfamiliar world for an engineer. Occasionally, the more familiar world of science, technology, and economics will…
Read MoreCVR Energy – another case study in low refining margins
Investors and analysts are confused about how to interpret low refining margins being reported this year. Much of the confusion stems from the confusing topic of RINs. I believe the low margins indicate a more fundamental weakness in the performance of many US refineries, which is inability to make enough on-spec gasoline from crude; and…
Read MoreUS retail octane value hits new high
Last week, the US average retail octane value (premium – regular gasoline price differential) hit a new high of 71.4 cents/gallon. This is the difference in pump price between premium and regular gasoline. If you fill your tank with premium today, you will pay, on average, 71.4 cents/gallon more than if you use regular. Record…
Read MoreStrange happenings in refineries
Strange things are happening in this refinery. Is anyone hurt? When will we have results of those catalyst analyses? What is really in those tanks? Where is my sister? Why does that French mathematician’s name keeps popping up everywhere? Who can I trust? When was the last time you read a novel all about an…
Read More