market misunderstanding of poo and biodiesel price
T4P,
I'm surprised that even you as a sophisticated investor fail to understand the fundamentals driving the price of Biodiesel.
The market is linking the value of Biodiesel stocks to the fall in the oil price from above $70 to around $60 currently. The fact is that while this oil price has fallen the net biodiesel price has actually risen over the same period from US$820/t to US$840/t.
- This stability in the biodiesel price is driven by the demand for biodiesel being underpinned by environmental issues and European Government mandates to increase the use of biodiesel to 5.75% by 2010. That would mean around 11.7m tonnes of biodiesel will be required in 2010 up from 3.18m tonnes in 2005. Therefore the market is incorrect in making a direct comparison of the value of JBF to the fluctuations in the oil price as the underlying drivers of the two are different.
JPR Price at posting:
0.0¢ Sentiment: Hold Disclosure: Held
