Mid-market values in the California LCFS credits market edged back above $66 as interest mounted in fourth quarter credits for year-end compliance. Indicative sell side indications held in the upper-$60s and above were and higher, with buy side indications pushing into the mid-$60s to nudge assessed fair value to $66.25 on Thursday. RINs showed mixed direction in an otherwise bullish day for oil prices.
A tightening D5/D6 spread is continuing to work against Brazilian sugar cane ethanol arbitrage economics into the US which are otherwise benefiting from the Real’s slump to more than ten year lows against the US dollar. Brazilian ethanol’s low carbon intensity rating under the LCFS methodology gives the fuel a 20 cent lift in value at current LCFS prices.