Oil prices are seeing modest losses for a 2nd day as geopolitical tensions have eased momentarily, while refined products are attempting to push higher as tensions in Washington heat up.

The tail continues to wag the dog for refined products, as the latest spike in RIN values has pulled both RBOB and ULSD futures from overnight losses, to early morning gains.  The political maneuvering surrounding the EPA and Renewable fuel standard was ratcheted up a notch this week, sending ethanol RINs to 90 cents this morning, up from 77 on Monday.

While the pressure on the EPA to keep the biofuel mandates at current levels may be good news for Agriculture businesses long term, near term things look a little rough as ethanol values plummeted to their lowest levels in over a year this week as inventories remain well above their 5 year range.

The divergence between crude and products leaves the outlook for prices for the coming weeks very much in doubt.  Buyers showed this week that they didn’t have the staying power to push prices past their September highs, leaving the technical picture stuck in neutral.  It seems like unless some new headline is able to shake things up, we may see prices move sideways for an extended period as a result.

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