While crude oil, heating oil and even the renewable ethanol had price declines in 2015, biodiesel stands alone as the only transportation fuel ending the year on a positive trend. This article from Bloomberg Business says biodiesel prices moved up at least 10 percent in the last month of the year, aided by the announcement that more biodiesel would be blended into the nation’s fuel supply as part of the Renewable Fuel Standard and the reinstatement of the federal $1-a-gallon biodiesel blending tax credit.
“It’s doing well,” Jerrod Kitt, an analyst at Linn Group in Chicago, said by phone Wednesday. “Keep in mind, heating oil has gone in the opposite direction.”
Biodiesel in the Midwest has increased 11 percent this month to $2.80 a gallon, the highest since July 23. During that same period, regular diesel in Chicago plummeted 13 percent to $1.0292 a gallon. Last week, diesel touched 95.54 cents, the cheapest in records going back to 2006, data compiled by Bloomberg show.
Futures for crude oil have dropped 12 percent in December, gasoline 8.7 percent and heating oil 18 percent on the New York Mercantile Exchange. Ethanol is down 7.3 percent on the Chicago Board of Trade.
Biodiesel’s advance has been tempered by the holidays and is likely to accelerate as traders return from vacation, said Eric De Bruin, a broker at StarFuels Inc. in Milwaukee.
The Environmental Protection Agency’s Nov. 30 Renewable Fuels Standard announcement said refiners such as Exxon Mobil Corp., Chevron Corp. and Valero Energy Corp. should have used 1.73 billion gallons of biodiesel this year and must consume 1.9 billion in 2016.
“Prices are going up,” De Bruin said by phone Wednesday. “It’s not the big jump over one day, but it’s very slowly going higher.”