By YANGE IKYAA
The most anticipated event of the week, a decision from OPEC+ on whether or not it would halt its monthly oil production increase of 400,000 bpd, ended up being a bit of a “non-event,” as member countries agreed to stick with the original plan but maintained the option to reverse that decision if necessary.
The bloc vowed to reconvene quickly if market conditions shift, and that if countries overproduce their quotas, such countries will see their upcoming production targets capped so as to balance their annual numbers.
Whilst oil prices did originally fall on the news, subsequent details about the caveats involved placated the market’s fears of OPEC+ disregarding Omicron risks. These caveats helped to push oil prices higher at the end of the week.
Meanwhile, with less than a month left of 2021, the US administration is reportedly readying itself to issue biofuels blending mandates to US oil refiners for 2021, a decision the Biden administration has delayed for more than a year. Considering the fact that the prices of Renewable Identification Numbers or, RINs, started falling this week, the market feeling is that of retroactively lower blending requirements.
RINs are generated by renewable fuel producers or importers and are bought and sold “attached” to the renewable fuel until the fuel is purchased by an “obligated party” (a refiner or importer of gasoline or diesel fuel) or blended with a petroleum-based transportation fuel.
At that point the RIN is “separated” from the fuel and may thereafter be independently bought or sold until it is retired to meet an obligated party’s renewable volume obligation.