2013 Renewable Fuels Standard

On August 7, 2013 by TradingDesk
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The EPA has finalized the regulatory action that establishes the 2013 annual percentage standards for the Renewable Fuels Standard (RFS) program for cellulosic biofuel, biomass-based diesel, advanced biofuel, and total renewable fuel. These standards apply to all gasoline and diesel produced or imported in 2013.

For more information about the RFS program visit:

http://www.epa.gov/otaq/fuels/renewablefuels/regulations.htm

http://www.epa.gov/otaq/fuels/renewablefuels/index.htm

 

CLICK HERE for a PDF of the 2013 RFS Program 

DOE Weekly Report

On August 7, 2013 by TradingDesk
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CLICK HERE for a PDF of the DOE Weekly Report

DOE Weekly Report

Global Equity Markets Moving Lower

On August 7, 2013 by TradingDesk
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Yesterday, news that the new Iranian president was open to new talks with the US over its nuclear program, and an announcement by the EPA that it would address its impossible-to-reach renewable fuel standard helped push energy prices lower, despite an escalation in violence in Yemen. The selling is continuing today, as global equity markets are moving lower, led a 4% drop in Japanese stocks, and as technical support begins to break down.

RBOB is currently testing $2.90, and has good support in this area, with a break targeting the July lows of $2.70. ULSD is back below $3 at the moment, and if it can break below its 200 day MA at $2.98, a move back into the $2.80s appears likely. Meanwhile, RIN values for ethanol dropped 14 cents yesterday, trading around the 90 cent mark and down from a high of $1.48 in July after the EPA acknowledged that its 2014 target for renewable fuel blending was unattainable. While current values still encourage domestic refiners to export refined products to avoid the obligation associated with selling refined products in the US, the fears that surging RIN values could drive gasoline prices past the $4 mark have subsided.

 

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Market Update

Recovery Pattern Continues

On August 6, 2013 by TradingDesk
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Energy futures were again on the verge of a major sell-off Monday morning, but as has become a pattern during the past few weeks, prices recovered mid-day and losses were largely erased for both ULSD and WTI. RBOB did end the day on a weak note, dropping nearly a nickel as the St. John refinery re-started one of its FCC units and eased fears of an East Coast supply crunch. RBOB charts are pointing towards another 5 cents of downside this week, while ULSD remains stuck in neutral as long as support holds around $3.

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Market Update

Energy Futures Pick Up Where They Left Off

On August 5, 2013 by TradingDesk
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Energy futures finished last week with a modest sell-off, and have picked up where they left off this morning, with crude and refined products down roughly 1% on the day. Increases in Libyan crude output, despite protests at oil facilities, and North Sea platforms returning from summer maintenance have Brent crude leading the move lower, as concerns over tight supplies in the Atlantic basin begin to ease.

Technical studies are rolling over from the summer bull run to neutral & bearish indications, with both RBOB and ULSD having wiped out much of their July gains. After having broken below $3, the next major chart support for RBOB comes in between $2.86 and $2.92, while ULSD futures still have a major test of $3, a mark that held support 5 times in the past 2 weeks. A break targets $2.92 to the downside.

Large speculators trimmed their record long positions in WTI and Brent crude last week, although levels remain the 2nd highest ever recorded, while refined products saw more net longs added. There are no active or forecast storms in the Atlantic at the moment, although the regulatory storm continues to build in Washington DC, as BP faces the latest accusations of energy market manipulation for Natural Gas trades in the fall of 2008.

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Market Update

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The Employment Situation

On August 2, 2013 by TradingDesk
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WTI and Brent crude oil led a broad rally in energy prices Thursday, after a positive manufacturing report from China eased fears that the world’s second biggest fuel consumer would hold its demand, and as more supply concerns were raised by fighting in Libya – which lost nearly 1 million barrels per day of production during the Arab Spring 2 years ago. The rally has stalled out this morning however, after the July Jobs report – which followed the 2013 pattern of US Economic Headlines showing sluggish but steady improvement – sparked more discussions of the FED cutting back on its easing programs now that the unemployment rate is ticking lower.

The endless FED debate could create a volatile day of trading. RBOB is near support at $3, while ULSD is near resistance at $3.10, which will create more tension between the bulls and bears. Charts favor higher prices after both contracts bounced sharply off of the mid-week lows.

THE EMPLOYMENT SITUATION — JULY 2013

Total nonfarm payroll employment increased by 162,000 in July, and the unemployment rate edged

down to 7.4 percent, the U.S. Bureau of Labor Statistics reported today. Employment rose in

retail trade, food services and drinking places, financial activities, and wholesale trade.

 

http://www.bls.gov/news.release/empsit.nr0.htm

 

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Market Update

Table A

The Summer Rally Continues

On August 1, 2013 by TradingDesk
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Wednesday morning it appeared that RBOB and ULSD prices were on the verge of a major sell off, with both contracts trading below pivotal support around $3, and momentum picking up to the downside. Both contracts bounced within the first hour of floor trading however, and the subsequent rally – particularly in ULSD which is now more than 10 cents above its Wednesday lows – suggests that the summer rally of 2013 may not be finished just yet.

The DOE report was largely a non-event, with stocks holding close to the same levels on the week, and prices did not react significantly to the data. The FOMC statement once again seemed to create more questions than answers, and US Stocks wiped out early gains for the day, after the DJIA set yet another record high in the morning.

As we begin August, the energy market continues to watch the same macro-themes that have dictated action throughout the year. A sluggish global economy, and rapidly increasing crude production will weigh on prices, while tensions in Egypt, Syria, Libya and Iraq are keeping the sellers at bay for the time being. The wild-card is central bank intervention that has kept stock and commodity markets flush with capital over the past 4 years. Even history seems to be conflicting, as August of 2011 saw the biggest sell-off in commodity prices in over 2 years, while August 2012 saw 30+ cent gains for refined products. With charts stuck in neutral, we’ll just have to sit back and watch the action for now.

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Market Update

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