• 2024年8月29日
  • Market: Oil Products

Summer has brought record low R99 cash prices — and nearly 3.2mn bl of vessel-supplied renewable diesel — to key California distribution hubs, but those seeking to take long-term supply positions must grapple with changing incentive programs and yet unseen consequences for supply flows. 

Looking ahead to the end of 2024, the future of RD supply is murky. Changing credit eligibility could discourage the volume of imports the west coast has grown accustomed to, domestic refining margins at the US Gulf coast have been indicated on the decline for much of the year, and a volatile underlying CARB diesel basis increases participants’ exposure to price risk.

Cash prices for R99 at the head of the pipeline (hop) in Los Angeles hit their lowest level in Argus series history on 6 August, when a downturn in the underlying CARB diesel basis pressured values to just $2.35/USG. The price slide, coupled with anecdotally unworkable spreads to local rack prices, weighed heavily on activity this summer, despite a steady stream of offshore shipments.

Deliveries via vessel to northern California in August were the second highest in Argus history at an estimated 741,000 bl — the latest in steady monthly increases since June — per data aggregated from bills of lading and global trade and analytics platform Kpler. Jones Act vessels from the US Gulf coast alone accounted for 448,000 bl, while shipments ex-Singapore constituted the remaining volume. 

Southern California received an estimated 847,000 bl, almost evenly split between offshore suppliers and those at the US Gulf coast. 

But the future of renewable diesel supply flows into California is mired with uncertainty surrounding incentives for both importers and domestic refiners. The BTC is set to expire with the 2024 calendar year, giving way to the IRA’s Clean Fuel Production Credit. The change would heavily favor US-based renewable diesel production and reduce awards for high-volume offshore imports to the US west coast, the latest pivot for an adolescent market that has struggled to achieve supply equilibrium.

Waterborne renewable diesel deliveries to California ports

Waterbourne RD to Cali

 

Neste — the leading offshore supplier of US R99 — is also slated to undergo turnarounds at both its Rotterdam, Netherlands, and Singapore facilities this quarter, followed by a second short-term Singapore turnaround in the fourth quarter. But the import lineup so far does not reflect a disruption in deliveries to the US this quarter.

At home, refining margins at the US Gulf coast are indicated on the upswing after narrowing through early August. 

Renewable diesel deliveries to the west coast by rail from other US regions reached a record-high of nearly 2mn bl in May, per data from the Energy Information Administration (EIA). Shipments by vessel are also trending higher, with an estimated 864,000 bl delivered to California in August — the highest since November.

RD margins

 

 

Spot R99 markets in California were little tested at the end of August, although both the Los Angeles and San Francisco markets drew support from a controversial surprise proposal to limit California Low Carbon Fuel Standard credit generation for renewable diesel made from soybean or canola oils. The California Air Resources Board will also consider a one-time tightening of annual carbon reduction targets for gasoline and diesel by 9pc in 2025, compared with the usual 1.25pc annual reduction and a 5pc stepdown first proposed in December 2023, per a 12 August release.

But an unsteady economic landscape for domestic production remains a key decision-driver among US refiners.

Vertex Energy will begin reversing a renewable fuels hydrocracking unit back to conventional fuel feedstocks this quarter at its 88,000 b/d Mobile, Alabama, refinery. The company at the time cited headwinds in the renewable fuels market that it expects to persist through 2025.

 

Author: Jasmine Davis, Editor, Associate Editor – Oil Products

 

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25/02/17

German heating oil sales in February higher on the year

German heating oil sales in February higher on the year

Hamburg, 17 February (Argus) — German heating oil sales in February are up from the same month last year, mainly driven by colder weather. Diesel demand, on the other hand, is down. Heating oil volumes submitted to Argus in the week ending 14 February held steady compared with the week prior. But volumes in the first half of February have been around 70pc higher than in the same period in 2024, and many buyers' tank levels are very low. Temperatures in most regions of Germany in February were 1.1-2.1°C lower than the 1991-2020 average, according to weather information website Wetterkontor. Average consumer stock levels were just over 51pc on 12 February, according to Argus MDX. This is not unusually low for the time of year, but is 1.2 percentage points below the same day in 2024. Traded diesel volumes in February to date are around 15pc lower than in the first half of February 2024. Traders attribute this to worsening economic conditions and an increase in bankruptcies. The production index for the manufacturing sector in December was at its lowest since May 2020. Increasing use of alternative fuels such as HVO100 could also be linked declining diesel demand, at least regionally, although only to a small extent. HVO100 sales in Germany are gradually increasing, and Argus estimates that around 15,000m³ (around 3,150 b/d) are sold per month. Meanwhile, 65,000 b/d of diesel arrived in northern German ports in February. This is an increase of around 68pc compared with January. Of the arrivals this month, 40pc came from India. These are the first cargo deliveries from the Jamnagar refinery in India to northern Germany since November 2024. By Johannes Guhlke Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Japan’s economy grows in 2024


25/02/17
News
25/02/17

Japan’s economy grows in 2024

Osaka, 17 February (Argus) — Japan's economy expanded for a fourth consecutive year in 2024 as corporate investment increased, even as oil product demand fell. Gross domestic product (GDP) rose at an annualised rate of 2.8pc in October-December, according to preliminary government data released on 17 February, following growth of 1.7pc in July-September and 3pc in April-June. This sent Japan's full-year 2024 GDP up by 0.1pc from a year earlier, its fourth straight year of growth after a Covid-19 induced slump in 2020. Nominal GDP amount totalled ¥609.3 trillion ($4 trillion) in 2024, exceeding ¥600 trillion for the first time. Investment by private-sector companies rose by 1.2pc from a year earlier in 2024, recording annualised growth of 1.9pc in October-December. The rise partially reflected a government push for a green and digital transformation of the economy in line with its 2050 net-zero emission goal. Such spending is expected to continue to increase under Tokyo's economic stimulus package. Japanese business federation Keidanren has forecast that nominal capital investment could rise to ¥115 trillion in the April 2027 to March 2028 fiscal year, up by 7.5pc from an estimated ¥107 trillion in 2024-25. But private consumption, which accounts for more than 50pc of GDP, dropped by 0.1pc from a year earlier in 2024, as inflation capped spending by consumers. This also probably weighed on demand for oil products such as gasoline, despite government subsidies. Japan's domestic oil product sales averaged 2.4mn b/d in 2024, down by 5.2pc from a year earlier, according to data from the trade and industry ministry Meti. Gasoline sales, which accounted for 31pc of the total, dropped by 2.2pc to 752,700 b/d over the same period. But Japanese electricity demand edged up by 0.7pc year on year to an average of 98.8GW in 2024, according to nationwide transmission system operator the Organisation for Cross-regional Co-ordination of Transmission Operators. Stronger power demand reflected colder than normal weather in March and unusually hot weather in October. Japan's real GDP is predicted to rise by 1.2pc during the 2025-26 fiscal year, following predicted 0.4pc growth in 2024-25 and a 0.7pc rise in 2023-24, the Cabinet Office said on 24 January. The figures are the Cabinet Office's official estimates and form the basis of its economic and fiscal management policies. By Motoko Hasegawa Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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German election impacts on energy and mobility sectors


25/02/17
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25/02/17

German election impacts on energy and mobility sectors

Hamburg, 17 February (Argus) — Germany heads to the polls on 23 February, with its political parties divided over how to revive the country's struggling economy and shape climate policy in the face of continued concern over high energy costs. How the next government's policies are shaped could significantly impact regional energy markets and Germany's role as a key player in the European economy over the next four years. But most parties appear in agreement over maintaining the outgoing government's stance on Russian gas. Opinion polls suggest that support for the conservative CDU/CSU party has cooled in recent months, but it is still expected to be tasked with forming the next government. It is all but impossible for one party to win an absolute majority in the German parliament, so parties typically have to form a coalition. Support for the far-right AfD has grown in recent months, but the party still trails by some distance in second place. The CDU/CSU says it will not form a coalition with the AfD, so barring a dramatic surge in support for the latter in the final days of campaigning, a CDU-led coalition — possibly including the Social Democrats (SPD) and Greens — is likely to be in charge by the end of the month. The AfD's stance on energy and climate change is largely at odds with most other parties, but the CDU/CSU, SPD and Greens have some common ground. They all acknowledge the Paris climate agreement and EU Green Deal and seek to adhere to emissions reduction mandates, and they all plan to extend the scope of the EU emissions trading system (ETS). The three parties' manifestos chime on a need to reduce energy prices — which are widely seen as a key factor in the downturn in German industrial output — while transitioning to cleaner forms of transport and prioritising climate protection. But the parties diverge on how best to achieve these goals. Many energy-intensive industries in Germany have struggled with high gas prices since Russia embarked on its full-scale invasion of Ukraine in 2022. The three parties all say they will bring down energy prices by adjusting taxes and subsidies, and increasing power generation. The parties aim to cut network fees and electricity taxes as much as possible within the EU, and the SPD and Greens plan to encourage the European Commission to compensate energy-intensive industries for high power prices. The three all agree that further expanding renewable energy is the best way to reduce energy prices but, unlike the SPD and Greens, the CDU/CSU is unwilling to close coal-fired power plants until they are replaced, and it wants to assess whether it is technically and financially feasible to reactivate mothballed nuclear power plants. The AfD wants to expand coal-fired and nuclear generation and halt the expansion of solar and wind. 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EU nears lifting sanctions on Syria


25/02/17
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25/02/17

EU nears lifting sanctions on Syria

Munich, 17 February (Argus) — The EU will meet on 24 February to discuss lifting sanctions on Syria, EU high representative for foreign affairs Kaja Kallas said on Sunday. But internal European politics and concerns raised by Greece and Cyprus over Turkey's growing influence in the region could slow the process. Speaking to Argus on the sidelines of the Munich Security Conference, Kallas said the prospect of lifting sanctions on Syria "is looking promising". The EU Foreign Affairs Council is scheduled to meet on 24 February to discuss Syria and other issues affecting the Middle East. France on 14 February convened an international conference on Syria in Paris, bringing together representatives from G7 nations, the EU, the UN, the Arab League, and the Gulf Cooperation Council. The parties issued a final statement calling for support of Syria's political transition, but the US did not join that statement. US sources with knowledge of the matter told Argus that the issues raised in the statement are things Washington has not decided on, since US president Donald Trump's administration is still formulating its policy regarding Syria. Another source with knowledge of ongoing European talks on Syria said Greece and Cyprus are more reluctant to lift sanctions on Syria. Any EU action will have to be agreed upon by all of the bloc's members. Both countries are leery of ties between Turkey and the Syrian Islamist group Hayat Tahrir al-Sham (HTS), the dominant faction in the new Syrian government. Greece and Cyprus are worried about an oversized Turkish influence in the eastern Mediterranean following the collapse of the regime of Bashar al-Assad in December. Sanctions remain one of the biggest obstacles to Syria's recovery. Damascus has been struggling to secure crude and refined oil products through public tenders largely because of those sanctions. Shipowners remain cautious about sending vessels there over concerns tankers being sanctioned or stranded. Last month the US waived sanctions prohibiting energy trade with Syria, but the country is still under EU and UK sanctions, which may have narrowed the pool for bidding. By Bachar Halabi Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Indonesia's gasoline imports hit record high in Dec


25/02/17
News
25/02/17

Indonesia's gasoline imports hit record high in Dec

Singapore, 17 February (Argus) — Indonesia, Asia-Pacific's largest gasoline importer, imported record high monthly volumes of gasoline in December 2024, according to GTT customs data. Indonesia imported 475,000 b/d of gasoline in December, up by 29pc on the month and 24pc on the year. Indonesia imported 378,500 b/d of gasoline in 2024 compared with 369,000 b/d in 2023. Singapore, a major gasoline blending hub, continued to be Indonesia's main supplier at 279,000 b/d of imports in December, followed by Malaysia at 97,000 b/d. The reason for the surge in import demand cannot be confirmed but could be because of an increase in Indonesia's 92R gasoline appetite as the government sought to introduce restrictions to ensure subsidised 90R gasoline fuel went to the targeted economic group. Indonesia's state-controlled refiner Pertamina issued a series of very prompt spot 92R gasoline tenders for loading in December. The prompt tenders arose because of an increase in domestic 92R gasoline demand, Indonesia-based gasoline traders said. This is a result of a combination of a narrower 90R and 92R price spread and the new restrictions, added a trader. The Singapore 92R gasoline crack spread, or the Argus Singapore 92R gasoline spot price against ICE Brent, averaged at $8.18/bl in December, as compared to an average of $5.47/bl in November, according to Argus' pricing data. By Aldric Chew Indonesia's gasoline import volume: GTT (b/d) Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.