Mon 10Dec2018: ICE gasoil back down to $565 as Brent/WTI spread makes a large adjustment today back to around $8/brl instead of $10. Overall 3:2:1 crack remains adequate at $14.84/brl still buoyed by the Heating Oil crack that remains at $26.65/brl. Rhine situation in Europe improving and this is weakening basis and might have been a reason for weakness with ICE today although Dec expiring tomorrow and still showing $10/mt backwardation. OPEC meeting was actually pretty successful but we will all have to wait until the next driving season to find out. Gasoline prices in central US are now well below $2 per gallon with some posting $1.85 or 0.49 cents/litre (and you were wondering why everyone in US is buying the biggest truck they can buy while French drivers paying close to $6 per gallon!). Biodiesel margins in US currently terrible as Bean oil has improved dramatically with BOGO now trading at +$71/MT or Jan and not showing any slow down while 3rd month POGO is also improved at -$37/MT. US Biodiesel producers now waging a feverish campaign to get the Biodiesel Tax Credit approved and all is possible over next few weeks – the BTC has been approved retroactively the last 11 years without fail if it was not already in place. It should be noted that in early 2019, LCFS CI adjustment on Diesel has now caused a spike in LCFS credit that have now jumped to $200/mt ( California is now decidedly the biggest regional market for biodiesel). In EU, Biodiesel premiums have not changed much in the spot with RME still showing +$810 in the spot while RED FAME for q2 is showing a healthy +260 as EU decided to reimpose countervailing duties on imported Argentina Biodiesel at 25-34%. In addition to EU & US, Peru also imposed duties on Argentina Biodiesel and despite this, soy oil has had little set-back as essentially Argentina Biodiesel, like Indonesia Biodiesel will have to be used domestically.

 

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Published by SOLFUELS

Commodity trade with wide experience in Agriculture, Energy & Biofuels

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