Renewable fuel credit prices down 10 per cent
NEW YORK, Dec 8 (Reuters) – U.S. renewable fuel credits used to comply with the country’s biofuels requirements slumped on Thursday, continuing the previous session’s decline on news that President-elect Donald Trump had picked a critic of environmental regulation to lead the Environmental Protection Agency (EPA).
Renewable fuel (D6) Renewable Identification Number credits for the current year traded at roughly 90 cents each, down from 99 cents each on Wednesday, traders said.
Prices of Biodiesel (D4) RINs for the current year also sank as low as $1.05 before hitting $1.08 by late afternoon, traders said. That compares with $1.15 on Wednesday.
Prices of the credits were under pressure after news that Trump selected Oklahoma Attorney General Scott Pruitt, an opponent of President Barack Obama’s measures to curb climate change, to head the EPA, which oversees the country’s biofuels program.
The drop in prices for RINs also weighed on U.S. gasoline futures and refining margins, traders said, noting that falling RIN prices incentives fuel production and higher inventories.
U.S. gasoline futures closed roughly flat at $1.50 gallon, while the U.S. and global benchmark crude prices settled up 2.15 per cent and 1.68 per cent, respectively.
Meanwhile, the U.S. gasoline refining margin, known as a crack spread, fell by nearly 9 per cent to $12.41 a barrel.
The controversial Renewable Fuel Standard (RFS) program requires oil companies to blend renewable fuels with gasoline and diesel or buy compliance credits from those that have. Pruitt’s selection raised expectations that the Trump administration may change the program to make it less costly for refiners.
(Reporting by Chris Prentice and Jarrett Renshaw; Editing by Alden Bentley and David Gregorio)
