The global oil market turmoil has not been bought by the US "ditch oil"!



The British "Financial Times" recently published an article saying that the international oil price plummeted an unexpected victim - the United States "ditch oil." The sharp drop in oil prices has made it impossible for the cheaper US “ditch oil” to be sold.

The turmoil in the oil market has spread to the kitchens of restaurants in the United States, because the chefs who have rushed to buy used cooking oil have found that they must be transported away from their pockets.

Biodiesel is a fuel that is extracted from animal fats and vegetable oils. At a time when crude oil prices were high, the rise of biodiesel in the United States turned waste into a highly sought-after commodity, and even attracted oil thieves with vacuum suction hoses.

However, the plunge in crude oil prices makes the advantage of biodiesel for conventional diesel no longer obvious. In the refineries that convert animal fats into fuel, the production capacity is much higher than demand. According to an economist at the University of Illinois, the US biodiesel industry lost about $130 million last year.

According to the data provided by The Jacobsen, the 2013 benchmark yellow grease is sold at 36 cents per pound. And as the financial dilemma of biodiesel refineries spread to the upstream, wholesale yellow grease now sells for less than 20 cents per pound.

Natalie Chakov, director of the Green Oil Recycling office in New York, said: “In the past, we used to pay for oil from our customers. Nowadays, people have to collect money to take the oil away. At present, the Green Oil Recovery Organization has stopped collecting edible oil and instead focused on cleaning the oil separator business.

Last week, the court winding up order for Grease Lightning began. The company is a collection company founded in 2010, and its dirty tanker was once a common sight outside New York City bars and restaurants.

The restaurant industry organization, the NYC Hospitality Alliance, confirmed that most carriers are reluctant to pay for used cooking oil. Ryan Faulkner, managing director of Virginia Biodiesel Refinery, said that at the highest price, the refinery would pay $3 per gallon to the collection company for used cooking oil. He said that as prices fell, "people can no longer pay any fees to restaurants."

Some large fast food chains are more successful in this regard. Yum Brands, which runs KFC, Pizza Hut and Taco Bell, told the Financial Times: "We work with contractors to collect the cooking oil we use. Then use it to produce biodiesel and animal feed. We don't pay for them to do this, they pay us."

For smaller restaurants, hope may still exist. The federal government recently decided to demand at least 1.9 billion gallons of biodiesel this year, almost twice the amount prescribed in a law introduced in 2007. Congress recently re-approved the biodiesel tax credit for this year and the next year.

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