[RE]fuel Report Market Commentary

While winter blending remained the backdrop to the UK’s certificate market, and consequently the natural appetite for certificates remained largely muted, participants could discern signs of trading interest returning after a prolonged period of stand-off.

While bids and offers remained in a range of 20p on the sell side and around 21.5p on the offer, the ranges had tightened and that had teased some trading interest out.

Most of the focus remained on Year 10, which was heard trading in batches at 20.5 and 20.9, with little to no trading seen on Year 11. Census assessed Year 10 tickets in between the traded range at 20.7p, with Year 11 unchanged at 20.8.

“There’s definitely a lot of blending going on, but there’s still quite good ticket demand,” one source said, with some in the market looking to take full advantage of their carry out allowance – the capacity to meet up to 25% of an obligation with RTFCs from the preceding period.

Across the wider diesel market, refining margins took a knock earlier in the week as US inventory data revealed burgeoning petrol stocks, but demand remains healthy for distillates, both in terms of heating oil and diesel fuel.

As such, ultra low sulphur barge prices have remained supported even as crude has softened since the OPEC meeting last week.

For biofuels, RME remains the go-to biofuel to cope with winter specifications, with price holding at $983/mt, with UCOME assessed just above that level at $1,004/mt.  

The announcement that the European Union was satisfied that enough progress had been made in terms of the UK’s approach to exiting the trading bloc for trade talks to resume was met with a softening of the pound against the US dollar, leaving the theoretical cap versus diesel and waste-based biofuels moving higher.