[RE]fuel Market Report Commentary

Year 10 and 11 certificates remained under pressure as February arrived, although a slightly softer tone to mineral oil prices left space for biodiesel premiums to firm marginally relieving some of the pressure from the theoretical certificate cap.

However, a lack of evident buying interest remained to gnaw at fundamental values as UK temperatures returned to close to freezing levels during the week, and blending remained route one for many market players.

Energy Census assessed Year 10 and Year 11 certificates marginally weaker at 15 p/certificate for Year 10 and 15.2 p for Year 11, amid offers heard just above those levels.

With low sulphur diesel reaching the lowest level seen in a month on Friday, to be assessed at $608.50/mt, traded prices for RME were heard at a $275/mt premium to the underlying low sulphur gasoil contract, with FAME 0 at around $215/mt over, offering scope for certificate prices to rise – at least on a theoretical basis.

Those are the first increases in FAME 0 biodiesel premiums since December 8, according to Energy Census records, and the first increase in RME premiums since December 15.

Good reasons remained for the apparent slowness of trading beyond blending, with the progress of the RTFO making heavy weather of an apparently-straightforward legislative process.

Sources at the Department for Transport continued to assure that the legislation was on track and would be implemented well ahead of the April start date, while an industry source said that the statutory instrument had still to undergo the two committee review stages prior to being enshrined into law.