33x WEEKLY REFINING INDICATORS REPORT … Fernandez, Analyst ... Information and sources for all charts and tables in this report were compiled from Scotia Howard Weil, EIA and Bloomberg

Page 1 of 12

Blake Fernandez, Analyst713.393.4524

[email protected]

21x

25x

29x

33x

37x

Jan Mar May Jul Sep Nov

Days of Crude Demand Cover

5-yr Avg. 2015 2016

21x

23x

25x

27x

29x


Days of Gasoline Demand Cover

5-yr Avg. 2015 2016

20x

28x

36x

44x

52x


Days of Distillate Demand Cover

5-yr Avg. 2015 2016

51x

56x

61x

66x

71x


Days of Total Product Demand Cover

5-yr Avg. 2015 2016

WEEKLY REFINING INDICATORS REPORT WEEK ENDING 06/17/2016

For all relevant disclosures and certifications see Appendix A Important Disclosures of this report.

Scotia Howard Weil is a division of Scotia Capital (USA) Inc., a member of the Scotiabank group, and represents

Scotiabank’s energy equities business in the United States.

Scotia Howard Weil 1100 Poydras Street, Suite 3500 New Orleans, LA 70163

June 22, 2016

Information and sources for all charts and tables in this report were compiled from Scotia Howard Weil, EIA and Bloomberg.

Quick Take: Somewhat bearish stats on the refining side

as we had hoped for some gasoline draws into what

should be a healthy driving season. Utilization ramped up

1.1% from last week, which contributed to the oil draw

and product build. Also, gasoline imports were up

129MBbl/d wk/wk adding to the build. Lower 48

production declined 34MBbl/d, now down about 1MMBbl/d

over year ago levels. Product demand looks healthy with

gasoline +3.9% Y/Y, while distillate is down 1.6%.

However, we expect an improvement in distillate demand

once rig activity increases later this year/next year.

• Trailing 4-week average crude throughput is 0.5%

below the year-ago comp. We estimate June demand

cover of 32.5 days (June ‘15 = 28.3 days, June 11-15

avg. = 25.3).

• Trailing 4-week average gasoline demand is 3.9%

above the year-ago comp. We estimate June demand


avg. = 23.5).

• Trailing 4-week average distillate demand is 1.6%

below the year-ago comp. We estimate June demand


avg. = 33.4).

• Trailing 4-week average total product demand is 2.1%

above the year-ago comp. We estimate June demand


avg. = 59.0).

June 22, 2016

Weekly Refining Indicators Report

DOE Inventories & Imports (000s)

Page 2 of 12

Current Year-ago % Change

5-Yr.

Average % Change

InventoriesCrude 530,626 462,993 15% 398,921 33%

Total Gasoline (includes RFG + blendstock) 237,631 218,494 9% 214,367 11%

Total Distillate (Diesel + #2 Heating Oil) 152,314 135,428 12% 127,913 19%

# 2 Heating Oil 13,445 12,871 4% 20,466 -34%

Diesel 138,869 122,557 13% 107,446 29%

ImportsCrude 8,439 6,765 25% 8,206 3%

Total Gasoline (includes RFG + blendstock) 876 896 -2% 815 8%

Total Distillate (Diesel + #2 Heating Oil) 146 128 14% 102 43%

Crude Throughput 16,505 16,532 0% 15,669 5%

Refinery Utilization 91.3% 94.0% -3% 90.3% 1%

Current Year-ago % Change

5-Yr.

Average % Change

PADD 1 (Northeast)

Crude 17,785 17,075 4% 12,982 37%


RBOB (Alcohol) 21,850 18,441 18% 17,810


# 2 Heating Oil 6,958 6,140 13% 13,195 -47%

Diesel 50,876 37,144 37% 28,377 79%

PADD 2 (Midwest)

Crude 153,672 137,733 12% 111,098 38%


RBOB (Alcohol) 6,065 6,704 -10% 6,060

Total Distillate (Diesel + #2 Heating Oil) 30,266 32,394 -7% 29,044 4%

PADD 3 (Gulf Coast)

Crude 272,857 230,432 18% 199,993 36%


RBOB (Alcohol) 11,041 11,260 -2% 10,798


PADD 4 (Rockies)

Crude 24,118 21,590 12% 18,318 32%


Total Distillate (Diesel + #2 Heating Oil) 3,355 4,316 -22% 4,038 -17%

PADD 5 (West Coast)

Crude 62,195 56,163 11% 56,220 11%



TOTAL U.S.

REGIONAL INVENTORY

June 22, 2016


Demand vs. Supply Charts

Page 3 of 12

975,000

1,080,000

1,185,000

1,290,000

1,395,000


Total Product Stocks (000 Bbls)

2015 2016 5-yr Avg

17,500

18,400

19,300

20,200

21,100


Total Product Demand (000 Bbl/d)

2015 2016 5-yr Avg

100,000

120,000

140,000

160,000

180,000


Distillate Stocks (000 Bbls)

2015 2016 5-yr Avg

3,200

3,500

3,800

4,100

4,400


Distillate Demand (000 Bbl/d)

2015 2016 5-yr Avg

190,000

210,000

230,000

250,000

270,000


Gasoline Stocks (000 Bbls)

2015 2016 5-yr Avg

13,000

14,000

15,000

16,000

17,000


US Crude Demand (000 Bbl/d)

2015 2016 5-yr Avg

320,000

380,000

440,000

500,000

560,000


US Crude Stocks (000 Bbls)

2015 2016 5-yr Avg

7,850

8,350

8,850

9,350

9,850


U.S. Gasoline Demand (000 Bbl/d)

2015 2016 5-yr Avg

June 22, 2016


Regional Refinery Utilization

Page 4 of 12

75

80

85

90

95

100

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

US Total Refinery Utilization (%)

'15 '16 5-yr Avg

60.0

70.0

80.0

90.0

100.0


PADD I Refinery Utilization (%)

5-yr Avg '16

60.0

70.0

80.0

90.0

100.0


PADD II Refinery Utilization (%)

5-yr Avg '16

60.0

70.0

80.0

90.0

100.0


PADD III Refinery Utilization (%)

5-yr Avg '16

60.0

70.0

80.0

90.0

100.0


PADD IV Refinery Utilization (%)

5-yr Avg '16

60.0

70.0

80.0

90.0

100.0


PADD V Refinery Utilization (%)

5-yr Avg '16

June 22, 2016


Regional Crack Spreads

Page 5 of 12

Average:

2Q15 $11.50

3Q15 $11.59

4Q15 $7.65

1Q16 $6.31

QTD 16 $9.38

Average:

2Q15 $21.87

3Q15 $22.29

4Q15 $15.23

1Q16 $11.95

QTD 16 $16.18

Average:

2Q15 $14.92

3Q15 $15.51

4Q15 $9.28

1Q16 $9.22

QTD 16 $11.27

Gulf Coast 3-2-1 (LLS)

Chicago 2-1-1 (WTI)

East Coast 6-3-2-1 (Brent + Freight)

$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

East Coast 6-3-2-1

5-yr Range '15 '16

$0.00

$10.00

$20.00

$30.00

$40.00

$50.00

Chicago 2-1-1

5-yr Range '15 '16

($6.00)

$0.00

$6.00

$12.00

$18.00

$24.00

Gulf Coast 3-2-1

5-yr Range '15 '16

June 22, 2016


Regional Crack Spreads

Page 6 of 12

Average:

2Q15 $28.07

3Q15 $28.76

4Q15 $22.58

1Q16 $17.28

QTD 16 $18.86

Average:

2Q15 $15.87

3Q15 $16.49

4Q15 $10.88

1Q16 $7.94

QTD 16 $10.59

Average:

2Q15 $15.42

3Q15 $14.38

4Q15 $14.38

1Q16 $11.35

QTD 16 $9.39

Singapore 2-1-1 (Dubai)

NW Europe 2-1-1 (Brent)

West Coast 5-3-2 (ANS cif W. Coast)

$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

NW Europe 2-1-1

5-yr Range '15 '16

$0.00

$12.00

$24.00

$36.00

$48.00

$60.00

West Coast 5-3-2

5-yr Range '15 '16

$0.00

$6.00

$12.00

$18.00

$24.00

$30.00

Singapore 2-1-1

5-yr Range '15 '16

June 22, 2016


Crude Oil Differentials

Page 7 of 12

Average:

2Q15 $7.67

3Q15 $7.40

4Q15 $9.24

1Q16 $8.92

QTD 16 $9.82

Average:

2Q15 $3.37

3Q15 $4.93

4Q15 $4.51

1Q16 $5.17

QTD 16 $5.40

Average:

2Q15 $1.73

3Q15 ($0.37)

4Q15 $1.50

1Q16 $2.85

QTD 16 $2.81

Average:

2Q15 $5.25

3Q15 $3.56

4Q15 $1.52

1Q16 $1.77

QTD 16 $1.91

LLS - ANS

LLS - WTI

LLS- Maya

LLS - Mars

($8)

$0

$8

$16

$24

$32

LLS - WTI

'15 '16 5-yr Avg

($14)

($7)

$0

$7

$14

$21

LLS - ANS

'14 '16 5-yr Avg

$0

$2

$4

$6

$8

$10

LLS - Mars

'15 '16 5-yr Avg

$0

$5

$10

$15

$20

$25

LLS - Maya

'15 '16 5-yr Avg

June 22, 2016


Crude Oil Differentials

Page 8 of 12

Average:

2Q15 $0.66

3Q15 $0.24

4Q15 $0.23

1Q16 $0.64

QTD 16 $1.36

Average:

2Q15 $4.59

3Q15 $3.32

4Q15 $1.29

1Q16 $1.13

QTD 16 $0.56

Average:

2Q15 ($0.67)

3Q15 ($1.38)

4Q15 $0.05

1Q16 $0.22

QTD 16 $0.86

Average:

2Q15 $6.81

3Q15 $6.47

4Q15 $2.33

1Q16 $2.64

QTD 16 $0.86

Brent - Clearbrook (Bakken)

LLS - Brent

Brent - WTI

WTI - WTS

($15)

($10)

($5)

$0

$5

$10

LLS - Brent

'15 '16 5-yr Avg

($8)

$0

$8

$16

$24

$32

Brent - WTI

'15 '16 5-yr Avg

($15)

$0

$15

$30

$45

$60

Brent - Clearbrook (Bakken)

'15 '16 5-yr Avg

($5)

$0

$5

$10

$15

$20

WTI-WTS

'15 '16 5-yr Avg

June 22, 2016


CFTC: Non-Commercial Positions

Page 9 of 12

NYMEX WTI NYMEX WTI: Open Interest vs. Price

NYMEX #2 Heating OilNYMEX RBOB

334,265 318,544

291,960

368,769 348,142 347,002

325,182 312,585

0

100,000

200,000

300,000

400,000

4/29/16 5/6/16 5/13/16 5/20/16 5/27/16 6/3/16 6/10/16 6/17/16

# o

f co

ntr

acts

Net Long (Short) Position1 contract = 1,000 barrels

75,028 72,916 71,537 69,930 64,488

59,574 57,437 52,455

0

30,000

60,000

90,000

120,000

4/29/16 5/6/16 5/13/16 5/20/16 5/27/16 6/3/16 6/10/16 6/17/16

# o

f co

ntr

acts

Net Long (Short) Position1 contract = 42,000 gallons

4,175

7,110

8,671 8,420

11,534 12,196

9,691

14,436

0

4,000

8,000

12,000

16,000

4/29/16 5/6/16 5/13/16 5/20/16 5/27/16 6/3/16 6/10/16 6/17/16

# o

f co

ntr

acts

Net Long (Short) Position1 contract = 42,000 gallons

$20.00

$45.00

$70.00

$95.00

$120.00

1

1.25

1.5

1.75

2

2011 2012 2013 2014 2015 2016 2017

WT

I ($/b

bl)

Oil

Op

en

In

tere

st (

MM

Co

ntr

acts

)

Open Interest WTI

June 22, 2016


Shipping

Page 10 of 12

Note: Arb spread estimates provided above represent absolute values:

Positive # Arb profit on NWE-sourced cargoes imported to U.S.

Negative # Arb profit (ignore +/- sign) on U.S.-sourced cargoes exported to NWE

Trans-Atlantic Arbitrage: CRUDE OIL Trans-Atlantic Arbitrage: GASOLINE

Gulf Coast/Europe Arbitrage: ULSD Persian Gulf-USGC: Freight Rate (250' dirty tanker)

0.0 0.0 0.0 0.2

0.0 0.0 0.0

3.4

0.0

1.0

2.0

3.0

4.0

4/29/16 5/6/16 5/13/16 5/20/16 5/27/16 6/3/16 6/10/16 6/17/16

ce

nts

pe

r g

allo

n

USGC-NWE (Net of Freight)

$0.53 $0.57

$0.00

$0.53

$0.93

$0.29

$0.99 $1.02

$0.00

$0.30

$0.60

$0.90

$1.20

4/29/16 5/6/16 5/13/16 5/20/16 5/27/16 6/3/16 6/10/16 6/17/16

$ p

er

ba

rre

l

LLS-Brent (Net of Freight)

14.9 13.3

11.4

15.3 14.1

11.4

7.1

0.0 0.0

7.0

14.0

21.0

28.0

4/29/16 5/6/16 5/13/16 5/20/16 5/27/16 6/3/16 6/10/16 6/17/16

ce

nts

pe

r g

allo

n

USAC-NWE (Net of Freight)

$0.85

$0.98 $1.05

$0.92

$0.79

$0.92 $0.92

$0.72

$0.00

$0.50

$1.00

$1.50

$2.00

4/29/16 5/6/16 5/13/16 5/20/16 5/27/16 6/3/16 6/10/16 6/17/16

$ p

er

ba

rre

l

Trailing 8 weeks

1,000

1,750

2,500

3,250

4,000

4,750

1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52

Total US Product Exports (000 Bbl/d)

5-yr Range '15 '16

1,000

1,750

2,500

3,250

4,000

4,750

1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52

Total US Product Imports (000 Bbl/d)

5-yr Range '15 '16

June 22, 2016


Energy Futures

Page 11 of 12

* Only 8 contracts available for European Gas Oil

* Only 8 contracts available for European Gas Oil

3-2-1 REFINING MARGIN

WTI

RBOB

#2 HEATING OIL

BRENT

RBOB

GASOIL

2-1-1 REFINING MARGIN

46

48

50

52

54

CL1 CL2 CL3 CL4 CL5 CL6 CL7 CL8 CL9 CL10 CL11 CL12

$ p

er

ba

rre

l

NYMEX WTI: 12-Month Strip

5/27/2016 6/3/2016 6/10/2016 6/17/2016

130

140

150

160

170

XB1 XB2 XB3 XB4 XB5 XB6 XB7 XB8 XB9 XB10 XB11 XB12

¢ p

er

ga

llo

n

NYMEX RBOB: 12-Month Strip

5/27/2016 6/3/2016 6/10/2016 6/17/2016

135

142

149

156

163

HO1 HO2 HO3 HO4 HO5 HO6 HO7 HO8 HO9 HO10 HO11 HO12

¢ p

er

ga

llo

n

NYMEX #2 Oil: 12-Month Strip

5/27/2016 6/3/2016 6/10/2016 6/17/2016

5.00

9.00

13.00

17.00

21.00

1 2 3 4 5 6 7 8 9 10 11 12 Avg.

$ p

er

ba

rre

l

NYMEX 3-2-1: 12-Month Strip

5/27/2016 6/3/2016 6/10/2016 6/17/2016

46

48

50

52

54

CO1 CO2 CO3 CO4 CO5 CO6 CO7 CO8 CO9 CO10 CO11 CO12

$ p

er

ba

rre

l

ICE Brent: 12-Month Strip

5/27/2016 6/3/2016 6/10/2016 6/17/2016

130

140

150

160

170

PG1 PG2 PG3 PG4 PG5 PG6 PG7 PG8 PG9 PG10 PG11 PG12

¢ p

er

ga

llo

n

ICE RBOB: 12-Month Strip

5/27/2016 6/3/2016 6/10/2016 6/17/2016

135

142

149

156

163

QS1 QS2 QS3 QS4 QS5 QS6 QS7 QS8 QS9 QS10 QS11 QS12

¢ p

er

ga

llo

n

ICE Gasoil: 12-Month Strip

5/27/2016 6/3/2016 6/10/2016 6/17/2016

5.00

9.00

13.00

17.00

21.00

1 2 3 4 5 6 7 8 9 10 11 12 Avg.

$ p

er

ba

rre

l

ICE 2-1-1: 12-Month Strip

5/27/2016 6/3/2016 6/10/2016 6/17/2016

June 22, 2016 Page 12 of 12


Appendix A: Important Disclosures

Analyst Certification I, Blake Fernandez, certify that the views expressed in this research report accurately reflect my personal views about the

subject securities or issuers; and I, Blake Fernandez, certify that no part of my compensation was, is, or will be directly or

indirectly related to the specific recommendation or views contained in this research report.

Important Disclosures This report was prepared by a Scotia Howard Weil Research analyst. Scotia Howard Weil is a Division of Scotia Capital (USA) Inc., a

US Registered broker-dealer and a member of the New York Stock Exchange and FINRA. Scotia Howard Weil Research analysts

focus primarily on the US Energy Sector. Scotia Capital (USA) Inc. is a wholly owned subsidiary of Scotia Capital Inc., a Canadian

registered investment dealer, and indirectly owned by The Bank of Nova Scotia. Scotiabank, together with “Global Banking and

Markets”, is a marketing name for the global corporate and investment banking and capital markets businesses of The Bank of Nova

Scotia and certain of its affiliates in the countries where they operate, including Scotia Capital Inc. and Scotia Capital (USA) Inc. In

addition to Scotia Howard Weil Research, Scotiabank publishes and distributes Scotiabank Global Banking and Markets Equity

Research (“Scotiabank Research”), which is a separate research publication. Scotia Howard Weil Research Analysts and

Scotiabank Research Analysts are independent from one another and their respective coverage of issuers are different. In addition,

because they are independent from one another, Scotia Howard Weil Research Analysts and Scotiabank Research Analysts may

have different opinions on the short-term and long-term outlooks of local and global markets and economies.

This report was prepared for general circulation and does not provide investment recommendations specific to individual investors. As

such, the financial instruments discussed in this report may not be suitable for all investors and investors must make their own

investment decisions based upon their specific investment objectives and financial situation utilizing their own financial advisors as they

deem necessary. Investors should consider Howard Weil’s research and/or ratings as only a single factor in making their investment

decisions. Past performance of the financial instruments recommended in this report should not be taken as an indication or guarantee

of future results.

All pricing of securities in reports is based on the closing price of the securities’ principal marketplace on the night before the publication

date, unless otherwise explicitly stated.

Any prices that are stated in this report are for informational purposes only. Scotiabank, Global Banking and Markets makes no

representation that any transaction may be or could have been effected at those prices.

The compensation of the research analyst who prepared this report is based on several factors, including but not limited to, the overall

profitability of Scotiabank, Global Banking and Markets and the revenues generated from its various departments, including investment

banking. Furthermore, the research analyst’s compensation is charged as an expense to various Scotiabank, Global Banking and

Markets departments, including investment banking. Research Analysts may not receive compensation from the companies they cover.

For Scotia Howard Weil Research analyst standards and disclosure policies, please visit http://www.howardweil.com/equity-research/

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33x WEEKLY REFINING INDICATORS REPORT … Fernandez, Analyst ... Information and sources for all charts and tables in this report were compiled from Scotia Howard Weil, EIA and Bloomberg