June 22, 2016

Blake Fernandez, Analyst713.393.4524

WEEKLY REFINING INDICATORS REPORT blakef@howardweil.com
WEEK ENDING 06/17/2016

Quick Take: Somewhat bearish stats on the refining side

Days of Crude Demand Cover
as we had hoped for some gasoline draws into what
should be a healthy driving season. Utilization ramped up 37x
1.1% from last week, which contributed to the oil draw
and product build. Also, gasoline imports were up 33x

129MBbl/d wk/wk adding to the build. Lower 48 29x

production declined 34MBbl/d, now down about 1MMBbl/d
over year ago levels. Product demand looks healthy with 25x
gasoline +3.9% Y/Y, while distillate is down 1.6%.
However, we expect an improvement in distillate demand 21x
Jan Mar May Jul Sep Nov
once rig activity increases later this year/next year. 5-yr Avg. 2015 2016

• Trailing 4-week average crude throughput is 0.5% Days of Gasoline Demand Cover
below the year-ago comp. We estimate June demand
cover of 32.5 days (June ‘15 = 28.3 days, June 11-15 29x

avg. = 25.3). 27x

• Trailing 4-week average gasoline demand is 3.9% 25x

above the year-ago comp. We estimate June demand
cover of 24.5 days (June ‘15 = 22.8 days, June 11-15 23x

avg. = 23.5).
21x
Jan Mar May Jul Sep Nov
• Trailing 4-week average distillate demand is 1.6% 5-yr Avg. 2015 2016
below the year-ago comp. We estimate June demand
cover of 40.2 days (June ‘15 = 34.2 days, June 11-15 Days of Distillate Demand Cover
avg. = 33.4).
52x

• Trailing 4-week average total product demand is 2.1% 44x

above the year-ago comp. We estimate June demand
cover of 67.6 days (June ‘15 = 62.5 days, June 11-15 36x
avg. = 59.0).
28x

20x
Jan Mar May Jul Sep Nov
5-yr Avg. 2015 2016

Days of Total Product Demand Cover

71x

66x

61x

56x

51x
Jan Mar May Jul Sep Nov
5-yr Avg. 2015 2016

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

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 Page 1 of 12
 Weekly Refining Indicators Report
DOE Inventories & Imports (000s)
TOTAL U.S.
5-Yr.
Current Year-ago % Change Average % Change
Inventories
Crude 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%

Imports
Crude 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%

REGIONAL INVENTORY
5-Yr.
Current Year-ago % Change Average % Change

PADD 1 (Northeast)
Crude 17,785 17,075 4% 12,982 37%
Total Gasoline (includes RFG + blendstock) 68,624 59,578 15% 58,915 16%
RBOB (Alcohol) 21,850 18,441 18% 17,810
Total Distillate (Diesel + #2 Heating Oil) 57,834 43,284 34% 41,572 39%
# 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%
Total Gasoline (includes RFG + blendstock) 53,118 48,186 10% 48,654 9%
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%
Total Gasoline (includes RFG + blendstock) 79,602 75,010 6% 71,828 11%
RBOB (Alcohol) 11,041 11,260 -2% 10,798
Total Distillate (Diesel + #2 Heating Oil) 47,630 43,032 11% 40,654 17%

PADD 4 (Rockies)
Crude 24,118 21,590 12% 18,318 32%
Total Gasoline (includes RFG + blendstock) 7,601 7,295 4% 6,452 18%
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 Gasoline (includes RFG + blendstock) 28,687 28,425 1% 28,564 0%
Total Distillate (Diesel + #2 Heating Oil) 13,230 12,402 7% 12,557 5%

June 22, 2016 Page 2 of 12

 Weekly Refining Indicators Report
Demand vs. Supply Charts

US Crude Demand (000 Bbl/d) US Crude Stocks (000 Bbls)

17,000 560,000

16,000 500,000

15,000 440,000

14,000 380,000

13,000 320,000
Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov

2015 2016 5-yr Avg 2015 2016 5-yr Avg

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

9,850 270,000

9,350 250,000

8,850 230,000

8,350 210,000

7,850 190,000
Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov

2015 2016 5-yr Avg 2015 2016 5-yr Avg

Distillate Demand (000 Bbl/d) Distillate Stocks (000 Bbls)

4,400 180,000

4,100 160,000

3,800 140,000

3,500 120,000

3,200 100,000
Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov

2015 2016 5-yr Avg 2015 2016 5-yr Avg

Total Product Demand (000 Bbl/d) Total Product Stocks (000 Bbls)
21,100 1,395,000

20,200 1,290,000

19,300 1,185,000

18,400 1,080,000

17,500 975,000
Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov

2015 2016 5-yr Avg 2015 2016 5-yr Avg

June 22, 2016 Page 3 of 12

 Weekly Refining Indicators Report
Regional Refinery Utilization

US Total Refinery Utilization (%) PADD I Refinery Utilization (%)

100 100.0

95
90.0
90
80.0
85

80 70.0

75 60.0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

'15 '16 5-yr Avg 5-yr Avg '16

PADD II Refinery Utilization (%) PADD III Refinery Utilization (%)

100.0 100.0

90.0 90.0

80.0 80.0

70.0 70.0

60.0 60.0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

5-yr Avg '16 5-yr Avg '16

PADD IV Refinery Utilization (%) PADD V Refinery Utilization (%)

100.0 100.0

90.0 90.0

80.0 80.0

70.0 70.0

60.0 60.0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

5-yr Avg '16 5-yr Avg '16

June 22, 2016 Page 4 of 12

 Weekly Refining Indicators Report
Regional Crack Spreads
East Coast 6-3-2-1 (Brent + Freight)
Average: East Coast 6-3-2-1
2Q15 $11.50
3Q15 $11.59 $25.00
4Q15 $7.65
1Q16 $6.31 $20.00

QTD 16 $9.38 $15.00

$10.00

$5.00

$0.00

5-yr Range '15 '16

Chicago 2-1-1 (WTI)

Average: Chicago 2-1-1
2Q15 $21.87
3Q15 $22.29 $50.00
4Q15 $15.23
1Q16 $11.95 $40.00

QTD 16 $16.18 $30.00

$20.00

$10.00

$0.00

5-yr Range '15 '16

Gulf Coast 3-2-1 (LLS)

Average: Gulf Coast 3-2-1
2Q15 $14.92
3Q15 $15.51 $24.00
4Q15 $9.28
1Q16 $9.22 $18.00

QTD 16 $11.27 $12.00

$6.00

$0.00

($6.00)

5-yr Range '15 '16

June 22, 2016 Page 5 of 12

 Weekly Refining Indicators Report
Regional Crack Spreads
West Coast 5-3-2 (ANS cif W. Coast)
Average: West Coast 5-3-2
2Q15 $28.07
$60.00
3Q15 $28.76
4Q15 $22.58
$48.00
1Q16 $17.28

QTD 16 $18.86 $36.00

$24.00

$12.00

$0.00

5-yr Range '15 '16

NW Europe 2-1-1 (Brent)

Average: NW Europe 2-1-1
2Q15 $15.87
3Q15 $16.49 $25.00

4Q15 $10.88
1Q16 $7.94 $20.00

QTD 16 $10.59 $15.00

$10.00

$5.00

$0.00

5-yr Range '15 '16

Singapore 2-1-1 (Dubai)

Average: Singapore 2-1-1
2Q15 $15.42
3Q15 $14.38 $30.00

4Q15 $14.38
1Q16 $11.35 $24.00

QTD 16 $9.39 $18.00

$12.00

$6.00

$0.00

5-yr Range '15 '16

June 22, 2016 Page 6 of 12

 Weekly Refining Indicators Report
Crude Oil Differentials
LLS- Maya LLS - Maya
Average: $25
2Q15 $7.67
3Q15 $7.40 $20
4Q15 $9.24
1Q16 $8.92 $15

QTD 16 $9.82 $10

$5

$0

'15 '16 5-yr Avg

LLS - Mars LLS - Mars

Average: $10
2Q15 $3.37
3Q15 $4.93 $8
4Q15 $4.51
1Q16 $5.17 $6

QTD 16 $5.40 $4

$2

$0

'15 '16 5-yr Avg

LLS - ANS LLS - ANS

$21
Average:
2Q15 $1.73
3Q15 ($0.37) $14
4Q15 $1.50
1Q16 $2.85 $7

QTD 16 $2.81 $0

($7)

($14)

'14 '16 5-yr Avg

LLS - WTI LLS - WTI

Average: $32
2Q15 $5.25
3Q15 $3.56 $24
4Q15 $1.52
1Q16 $1.77 $16

QTD 16 $1.91 $8

$0

($8)

'15 '16 5-yr Avg

June 22, 2016 Page 7 of 12

 Weekly Refining Indicators Report
Crude Oil Differentials
LLS - Brent LLS - Brent
Average: $10
2Q15 $0.66
3Q15 $0.24 $5
4Q15 $0.23
1Q16 $0.64 $0

QTD 16 $1.36 ($5)

($10)

($15)

'15 '16 5-yr Avg

Brent - WTI Brent - WTI

Average: $32
2Q15 $4.59
3Q15 $3.32 $24
4Q15 $1.29
1Q16 $1.13 $16

QTD 16 $0.56 $8

$0

($8)

'15 '16 5-yr Avg

WTI - WTS WTI-WTS

Average:
$20
2Q15 ($0.67)
3Q15 ($1.38) $15
4Q15 $0.05
1Q16 $0.22 $10

QTD 16 $0.86 $5

$0

($5)

'15 '16 5-yr Avg

Brent - Clearbrook (Bakken) Brent - Clearbrook (Bakken)

Average:
$60
2Q15 $6.81
3Q15 $6.47
$45
4Q15 $2.33
1Q16 $2.64
$30

QTD 16 $0.86
$15

$0

($15)

'15 '16 5-yr Avg

June 22, 2016 Page 8 of 12

 Weekly Refining Indicators Report
CFTC: Non-Commercial Positions

NYMEX WTI NYMEX WTI: Open Interest vs. Price

Net Long (Short) Position 2 $1 20.0 0

Oil Open Interest (MM Contracts)

1 contract = 1,000 barrels

400,000 368,769 1.75 $9 5.00

348,142 347,002
334,265 325,182 312,585
318,544

WTI ($/bbl)
291,960
300,000
# of contracts

1.5 $7 0.00

200,000
1.25 $4 5.00

100,000

1 $2 0.00
0 2011 2012 2013 2014 2015 20 16 2017
4/29/16 5/6/16 5/13/16 5/20/16 5/27/16 6/3/16 6/10/16 6/17/16

Open Interest WTI

NYMEX RBOB NYMEX #2 Heating Oil

Net Long (Short) Position Net Long (Short) Position
1 contract = 42,000 gallons 1 contract = 42,000 gallons

120,000 16,000 14,436

12,196
11,534
90,000 12,000
# of contracts
# of contracts

75,028 72,916 71,537 9,691

69,930
64,488 8,671 8,420
59,574 57,437
60,000 52,455 8,000 7,110

4,175
30,000 4,000

0 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 4/29/16 5/6/16 5/13/16 5/20/16 5/27/16 6/3/16 6/10/16 6/17/16

June 22, 2016 Page 9 of 12

 Weekly Refining Indicators Report
Shipping

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

LLS-Brent USAC-NWE
(Net of Freight) (Net of Freight)

$1.20 28.0

$0.99 $1.02
$0.93

cents per gallon

$0.90 21.0
$ per barrel

14.9 15.3
14.1
$0.57 13.3
$0.60 $0.53 $0.53 14.0
11.4 11.4

$0.29 7.1
$0.30 7.0

$0.00 0.0
$0.00 0.0
4/29/16 5/6/16 5/13/16 5/20/16 5/27/16 6/3/16 6/10/16 6/17/16 4/29/16 5/6/16 5/13/16 5/20/16 5/27/16 6/3/16 6/10/16 6/17/16

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

USGC-NWE Trailing 8 weeks

(Net of Freight)
$2.00
4.0
3.4
$1.50
cents per gallon

$ per barrel

3.0
$1.05
$0.98
$1.00 $0.92 $0.92 $0.92
$0.85
2.0 $0.79
$0.72

1.0 $0.50

0.2
0.0 0.0 0.0 0.0 0.0 0.0
0.0 $0.00
4/29/16 5/6/16 5/13/16 5/20/16 5/27/16 6/3/16 6/10/16 6/17/16 4/29/16 5/6/16 5/13/16 5/20/16 5/27/16 6/3/16 6/10/16 6/17/16

Total US Product Exports (000 Bbl/d) Total US Product Imports (000 Bbl/d)
4,750 4,750

4,000 4,000

3,250 3,250

2,500 2,500

1,750 1,750

1,000 1,000
1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52

5-yr Range '15 '16 5-yr Range '15 '16

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

June 22, 2016 Page 10 of 12

 Weekly Refining Indicators Report
Energy Futures
WTI BRENT
NYMEX WTI: 12-Month Strip ICE Brent: 12-Month Strip
54 54

52 52
$ per barrel

$ per barrel
50 50

48 48

46 46
CL1 CL2 CL3 CL4 CL5 CL6 CL7 CL8 CL9 CL10 CL11 CL12 CO1 CO2 CO3 CO4 CO5 CO6 CO7 CO8 CO9 CO10 CO11 CO12

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

RBOB RBOB
NYMEX RBOB: 12-Month Strip ICE RBOB: 12-Month Strip
170 170

160 160
¢ per gallon

¢ per gallon

150 150

140 140

130 130
XB1 XB2 XB3 XB4 XB5 XB6 XB7 XB8 XB9 XB10 XB11 XB12 PG1 PG2 PG3 PG4 PG5 PG6 PG7 PG8 PG9 PG10 PG11 PG12

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

#2 HEATING OIL GASOIL

NYMEX #2 Oil: 12-Month Strip ICE Gasoil: 12-Month Strip

163 163

156 156
¢ per gallon

¢ per gallon

149 149

142 142

135 135
HO1 HO2 HO3 HO4 HO5 HO6 HO7 HO8 HO9 HO10 HO11 HO12 QS1 QS2 QS3 QS4 QS5 QS6 QS7 QS8 QS9 QS10 QS11 QS12

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

* Only 8 contracts available for European Gas Oil

3-2-1 REFINING MARGIN 2-1-1 REFINING MARGIN

NYMEX 3-2-1: 12-Month Strip ICE 2-1-1: 12-Month Strip

21.00 21.00

17.00 17.00
$ per barrel

$ per barrel

13.00 13.00

9.00 9.00

5.00 5.00
1 2 3 4 5 6 7 8 9 10 11 12 Avg. 1 2 3 4 5 6 7 8 9 10 11 12 Avg.

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

* Only 8 contracts available for European Gas Oil

June 22, 2016 Page 11 of 12

 Weekly Refining Indicators Report
Appendix A: Important Disclosures
Information and sources for all charts and tables in this report were compiled from Scotia Howard Weil, EIA and Bloomberg.

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
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All pricing of securities in reports is based on the closing price of the securities’ principal marketplace on the night before the publication
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June 22, 2016 Page 12 of 12