RINs Rallied to Their Highest Level

After a Thursday reversal wiped out early losses, the energy complex is moving lower once again to start Friday’s trading. While it’s certainly been a busy week, the net change for refined products has been minimal with diesel prices up just about 2 cents for the week, while gasoline futures are up less than a penny at this point as billions of people around the world try to guess at what will change once control of the US federal government transitions next year.

After a slight dip in early post-election trading, RINs have rallied to their highest level since January this week, with both D4 and D6 values reaching 75 cents/RIN Thursday.

California’s LCFS credit values have also rallied to their highest levels of the year north of $70/credit, alongside another push higher in California’s Carbon Allowance values, and Washington State’s credits after voters decided to keep Washington’s Cap and Trade program intact. California regulators are voting today on CARB’s plans to artificially raise prices on both of their programs, and the governor has called a special session to make plans to combat the incoming federal administration.

Hurricane Rafael continues to churn through the Gulf Coast, and has once again seen a notable shift in its forecast path overnight. Yesterday the storm appeared to be heading West and South into Mexico, and now this morning forecasts show the storm making a clockwise loop in the middle of the gulf before making its move towards land. Most models continue to point the storm at Mexico, but a few still keep the door open for a landfall in central Louisiana, but the good news is the system is losing steam as it goes.

While the storm is losing strength during this loop, and won’t be a major issue to the US Gulf Coast, the extended time spent near the Gulf of Mexico oil production zone means it will take several more days for workers to return to normal operations off-shore, which could lead to some short-term tightness for refiners on shore who need those barrels to operate. The extended period of rough seas is also likely to slow down the massive import/export flows of both crude and refined products from the region, but should not do much in the way of damage to infrastructure.

Phillips 66 reported unplanned flaring at its Wilmington CA refinery overnight. The cause and duration of the upset were not listed in the filing (which is typical with AQMD reports) but basis values in the LA market have ticked higher this week following reports of maintenance being done at the facility.

An upset at the Cenovus (FKA Husky) refinery in Lima OH caused a brief shelter in place order for some nearby businesses Thursday after gasoline vapors caused a spike in Benzene levels in the air. The unit being worked on was stabilized according to the company but it’s unclear if that event will slow operations.