October 8, 2014
Blake Fernandez504.582.2528
[email protected]
WEEKLY REFINING INDICATORS REPORT
Leonard Raymond504.582.2884
[email protected]
WEEK ENDING 10/03/2014
Quick Take: Higher imports largely accounted for the larger
than expected crude build this week alongside a slight
downtick in refinery utilization. While lower run rates are
expected this time of year, utilization levels are actually
trending ~3% higher than the past 2-years which is contributing
to the product builds. From a regional standpoint Cushing
inventories actually drew this week now down to 18.9MMBbls
while Gulf Coast increased less than 1MMBbls. This may make
it difficult for the major benchmark indicators such as WTI and
LLS to materially disconnect from Brent near-term. On the
demand side lower pump prices are not having the impact one
would expect with Y/Y trailing 4-wk gasoline demand -1.3%
and distillate -0.6%. From a big picture standpoint we remain
cautious on the refining sector until we get better clarity re:
underlying global demand (given the distillation expansion
currently underway) and a sense that crude differentials will
expand back toward sell side modeling expectations.
•
•
•
Trailing 4-week average crude throughput is 2.8% above
the year-ago comp. We estimate October demand cover of
22.7 days (October ‘13 = 25.4 days, October 09-13 avg. =
24.7).
Days of Crude Demand Cover
27x
25x
23x
21x
Jan
May
5-yr Avg.
Jul
Sep
Nov
2013
2014
Days of Gasoline Demand Cover
29x
27x
25x
23x
21x
Jan
Trailing 4-week average gasoline demand is 1.3% below
the year-ago comp. We estimate October demand cover of
24.1 days (October ‘13 = 23.9 days, October 09 -13 avg. =
23.6).
Trailing 4-week average distillate demand is 0.6% below
the year-ago comp. We estimate October demand cover of
33.2 days (October ‘13 = 31.5 days, October 09-13 avg. =
37.8).
Mar
Mar
May
Jul
5-yr Avg.
Sep
Nov
2013
2014
Days of Distillate Demand Cover
55x
48x
41x
34x
•
Trailing 4-week average total product demand is 0.7%
above the year-ago comp. We estimate October demand
cover of 58.8 days (October ‘13 = 58.2 days, October 09-13
avg. = 58.4).
27x
20x
Jan
Mar
May
5-yr Avg.
Jul
Sep
2013
Nov
2014
Days of Total Product Demand Cover
65x
60x
55x
50x
Jan
Mar
May
5-yr Avg.
Jul
2013
Sep
Nov
2014
Information and sources for all charts and tables in this report were compiled from Howard Weil, EIA and Bloomberg.
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. All relevant disclosures and certifications begin on Page 12 of this report.
Howard Weil | Scotia Capital (USA), Inc.  1100 Poydras Street, Suite 3500  New Orleans, LA 70163
Page 1 of 12
Weekly Refining Indicators Report
DOE Inventories & Imports (000s)
TOTAL U.S.
Current
Year-ago % Change
5-Yr.
Average % Change
Inventories
Crude
361,650
370,539
-2%
354,499
2%
Total Gasoline (includes RFG + blendstock) 209,668
219,879
-5%
211,489
-1%
Total Distillate (Diesel + #2 Heating Oil)
126,140
126,038
0%
148,978
-15%
13,710
112,430
18,482
107,556
-26%
5%
37,883
111,096
-64%
1%
7,712
8,043
-4%
8,515
417
576
-28%
643
-35%
47
139
-66%
154
-70%
15,554
14,890
# 2 Heating Oil
Diesel
Imports
Crude
Total Gasoline (includes RFG + blendstock)
Total Distillate (Diesel + #2 Heating Oil)
Crude Throughput
Refinery Utilization
89.3%
86.0%
4%
4%
14,541
84.8%
-9%
7%
5%
REGIONAL INVENTORY
Current
Year-ago % Change
5-Yr.
Average % Change
PADD 1 (Northeast)
Crude
Total Gasoline (includes RFG + blendstock)
RBOB (Alcohol)
Total Distillate (Diesel + #2 Heating Oil)
# 2 Heating Oil
Diesel
9,978
11,407
-13%
11,948
-16%
54,909
58,364
-6%
53,989
2%
15,381
18,149
-15%
16,758
42,493
40,034
6%
57,604
-26%
6,888
35,605
10,899
29,135
-37%
22%
29,639
27,965
-77%
27%
91,602
47,111
98,190
49,276
-7%
93,509
50,112
-2%
-4%
5,768
6,557
-12%
6,376
30,143
29,664
2%
29,896
1%
185,093
72,378
188,605
78,579
-2%
179,379
72,972
-1%
PADD 2 (Midwest)
Crude
Total Gasoline (includes RFG + blendstock)
RBOB (Alcohol)
Total Distillate (Diesel + #2 Heating Oil)
-6%
PADD 3 (Gulf Coast)
Crude
Total Gasoline (includes RFG + blendstock)
RBOB (Alcohol)
-8%
3%
9,948
11,069
-10%
11,418
Total Distillate (Diesel + #2 Heating Oil)
37,437
40,187
-7%
45,892
-18%
Crude
Total Gasoline (includes RFG + blendstock)
20,159
19,191
5%
17,122
18%
7,624
4,075
6,297
3,770
21%
6,321
3,158
21%
Crude
Total Gasoline (includes RFG + blendstock)
54,818
27,646
53,147
27,364
3%
1%
52,541
28,096
-2%
Total Distillate (Diesel + #2 Heating Oil)
11,991
12,382
-3%
12,428
-4%
PADD 4 (Rockies)
Total Distillate (Diesel + #2 Heating Oil)
8%
29%
PADD 5 (West Coast)
October 8, 2014
4%
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
400,000
15,750
350,000
14,500
13,250
300,000
Jan
Mar
May
'13
Jul
'14
Sep
Nov
Jan
Mar
5-yr Avg
May
Jul
'13
Sep
'14
Nov
5-yr Avg
U.S. Gasoline Stocks (000 Bbls)
U.S. Gasoline Demand (000 Bbl/d)
250,000
9,850
9,375
225,000
8,900
200,000
8,425
175,000
7,950
Jan
Mar
May
Jul
'13
'14
Sep
Jan
Nov
Mar
May
Jul
'13
5-yr Avg
US Distillate Demand (000 Bbl/d)
'14
Sep
Nov
5-yr Avg
US Distillate Stocks (000 Bbls)
4,450
180,000
160,000
4,000
140,000
3,550
120,000
3,100
100,000
Jan
Mar
May
'13
Jul
'14
Sep
Nov
Jan
Mar
5-yr Avg
May
'13
US Total Product Demand (000 Bbl/d)
20,750
Jul
'14
Sep
Nov
5-yr Avg
US Total Product Stocks (000 Bbls)
1,200,000
1,150,000
19,500
1,100,000
18,250
1,050,000
17,000
1,000,000
Jan
Mar
May
'13
October 8, 2014
Jul
'14
Sep
5-yr Avg
Nov
Jan
Mar
May
'13
Jul
'14
Sep
Nov
5-yr Avg
Page 3 of 12
Weekly Refining Indicators Report
Regional Refinery Utilization
US Total Refinery Utilization (%)
PADD I Refinery Utilization (%)
95
100.0
90
90.0
85
80.0
80
70.0
75
60.0
Jan Feb
Mar Apr May
'13
Jun
Jul
'14
Aug Sep Oct
Nov Dec
Jan Feb
5-yr Avg
Mar Apr May
Jun Jul
'10-'13 avg
Aug Sep Oct
Nov Dec
'14
PADD III Refinery Utilization (%)
PADD II Refinery Utilization (%)
101.0
100.0
91.0
90.0
81.0
80.0
71.0
70.0
60.0
61.0
Jan Feb
Mar Apr May
Jun Jul
'10-'13 avg
Aug Sep Oct
Jan Feb
Nov Dec
Mar Apr May
Jun Jul
'10-'13 avg
'14
Aug Sep Oct
Nov Dec
'14
PADD V Refinery Utilization (%)
PADD IV Refinery Utilization (%)
101.0
100.0
91.0
90.0
81.0
80.0
71.0
70.0
60.0
61.0
Jan Feb
Mar Apr May
Jun Jul
'10-'13 avg
October 8, 2014
Aug Sep Oct
'14
Nov Dec
Jan Feb
Mar Apr May
Jun Jul
'10-'13 avg
Aug Sep Oct
Nov Dec
'14
Page 4 of 12
Weekly Refining Indicators Report
Regional Crack Spreads
East Coast 6-3-2-1 (Brent + Freight)
Average:
4Q13
1Q14
2Q14
3Q14
QTD 14
$3.70
$8.39
$7.46
$8.75
$12.05
East Coast 6-3-2-1
$25.00
$20.00
$15.00
$10.00
$5.00
$0.00
5-yr Range
Chicago 2-1-1 (WTI)
Average:
4Q13
1Q14
2Q14
3Q14
$20.03
$21.18
$22.08
$20.55
QTD 14
$17.80
'13
'14
Chicago 2-1-1
$50.00
$40.00
$30.00
$20.00
$10.00
$0.00
5-yr Range
Gulf Coast 3-2-1 (LLS)
Average:
4Q13
1Q14
2Q14
3Q14
$9.47
$10.86
$14.05
$12.11
QTD 14
$11.52
'13
'14
Gulf Coast 3-2-1
$25.00
$20.00
$15.00
$10.00
$5.00
$0.00
($5.00)
5-yr Range
October 8, 2014
'13
'14
Page 5 of 12
Weekly Refining Indicators Report
Regional Crack Spreads
West Coast 5-3-2 (ANS cif W. Coast)
Average:
4Q13
1Q14
2Q14
3Q14
$12.97
$14.00
$19.41
$16.85
QTD 14
$21.05
West Coast 5-3-2
$42.50
$34.00
$25.50
$17.00
$8.50
$0.00
5-yr Range
NW Europe 2-1-1 (Brent)
Average:
4Q13
1Q14
2Q14
3Q14
$8.30
$8.97
$11.54
$12.70
QTD 14
$13.33
'13
'14
NW Europe 2-1-1
$25.00
$20.00
$15.00
$10.00
$5.00
$0.00
5-yr Range
Singapore 2-1-1 (Dubai)
Average:
4Q13
1Q14
2Q14
3Q14
$11.43
$14.86
$13.88
$13.89
QTD 14
$13.24
'13
'14
Singapore 2-1-1
$30.00
$24.00
$18.00
$12.00
$6.00
$0.00
5-yr Range
October 8, 2014
'13
'14
Page 6 of 12
Weekly Refining Indicators Report
Crude Oil Differentials
LLS - Maya
LLS- Maya
Average:
4Q13
1Q14
2Q14
3Q14
$11.59
$15.17
$9.76
$10.09
$24
$18
$12
QTD 14
$9.31
$6
$0
'13
$5.28
$3.73
$4.73
$3.70
QTD 14
$3.55
5-yr Avg
LLS - Mars
LLS - Mars
Average:
4Q13
1Q14
2Q14
3Q14
'14
$12
$9
$6
$3
$0
($3)
'13
LLS - ANS
Average:
4Q13
1Q14
2Q14
3Q14
($4.08)
($1.52)
($4.05)
($1.24)
'14
5-yr Avg
LLS - ANS
$15
$10
$5
$0
QTD 14
$2.50
($5)
($10)
($15)
'13
$3.61
$5.84
$2.41
$3.43
QTD 14
$2.85
5-yr Avg
LLS - WTI
LLS - WTI
Average:
4Q13
1Q14
2Q14
3Q14
'14
$35
$28
$21
$14
$7
$0
($7)
'13
October 8, 2014
'14
5-yr Avg
Page 7 of 12
Weekly Refining Indicators Report
Crude Oil Differentials
LLS - Brent
LLS - Brent
Average:
4Q13
1Q14
2Q14
3Q14
QTD 14
($8.36)
($3.51)
($4.35)
($0.94)
$1.22
$10
$5
$0
($5)
($10)
($15)
'13
QTD 14
$11.97
$9.35
$6.75
$4.37
$1.63
5-yr Avg
Brent - WTI
Brent - WTI
Average:
4Q13
1Q14
2Q14
3Q14
'14
$32
$24
$16
$8
$0
($8)
'13
$3.85
$5.45
$7.35
$8.86
QTD 14
$5.75
5-yr Avg
WTI-WTS
WTI - WTS
Average:
4Q13
1Q14
2Q14
3Q14
'14
$20
$15
$10
$5
$0
($5)
'13
QTD 14
$23.60
$12.95
$11.47
$10.81
$5.68
5-yr Avg
Brent - Clearbrook (Bakken)
Brent - Clearbrook (Bakken)
Average:
4Q13
1Q14
2Q14
3Q14
'14
$50
$40
$30
$20
$10
$0
'13
October 8, 2014
'14
'10-'12 Avg
Page 8 of 12
Weekly Refining Indicators Report
CFTC: Non-Commercial Positions
NYMEX WTI
NYMEX WTI: Open Interest vs. Price
Net Long (Short) Position
450,000
324,066 323,473 317,727
302,564 299,982 297,281 296,052 295,946
300,000
150,000
0
8/15/14
8/22/14
8/29/14
9/5/14
9/12/14
9/19/14
9/26/14
$120.00
1.75
$95.00
1.5
$70.00
1.25
$45.00
1
$20.00
2009
10/3/14
WTI ($/bbl)
# of contracts
600,000
Oil Open Interest (MM Contracts)
2
1 contract = 1,000 barrels
2010
2011
2012
Open Interest
NYMEX RBOB
2013
2014
WTI
NYMEX #2 Heating Oil
Net Long (Short) Position
Net Long (Short) Position
1 contract = 42,000 gallons
1 contract = 42,000 gallons
100,000
5,000
75,000
0
2,332
1,545
53,809
50,171
50,000
41,668
41,377
40,453
35,048
37,456
34,686
25,000
# of contracts
# of contracts
76
8/15/14
(5,000)
(2,916)
8/22/14
8/29/14
9/5/14
9/12/14
9/19/14
(2,575)
(2,674)
9/26/14
10/3/14
(7,137)
(10,000)
(10,037)
0
8/15/14
8/22/14
October 8, 2014
8/29/14
9/5/14
9/12/14
9/19/14
9/26/14
10/3/14
(15,000)
Page 9 of 12
Weekly Refining Indicators Report
Shipping
Trans-Atlantic Arbitrage: CRUDE OIL
Trans-Atlantic Arbitrage: GASOLINE
WTI-Brent
(Net of Freight)
USAC-NWE
(Net of Freight)
20.0
$3.00
$ per barrel
$0.00
8/15/14
($3.00)
($3.24)
8/22/14
8/29/14
9/5/14
9/12/14
($2.83)
($2.90)
9/19/14
9/26/14
($0.55)
10/3/14
($0.39)
($3.30)
($4.01)
($6.00)
cents per gallon
17.5
15.0
10.0
7.7
4.0
5.0
7.5
3.9
1.9
($5.62)
0.0
0.0
0.0
8/15/14
($9.00)
8/22/14
8/29/14
9/5/14
9/12/14
9/19/14
9/26/14
10/3/14
Gulf Coast/Europe Arbitrage: ULSD
Persian Gulf-USGC: Freight Rate (250' dirty tanker)
USGC-NWE
Trailing 8 weeks
(Net of Freight)
$1.20
3.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
8/15/14
8/22/14
8/29/14
9/5/14
9/12/14
9/19/14
9/26/14
10/3/14
$ per barrel
cents per gallon
$0.90
1.5
$0.79
$0.79
$0.66
$0.66
$0.60
$0.52
$0.52
$0.52
$0.46
$0.30
(1.5)
$0.00
8/15/14
(3.0)
8/22/14
8/29/14
9/5/14
9/12/14
9/19/14
9/26/14
10/3/14
Total US Product Imports (000 Bbl/d)
Total US Product Exports (000 Bbl/d)
4,000
4,000
3,500
3,500
3,000
3,000
2,500
2,500
2,000
2,000
1,500
1,500
1,000
1,000
1
4
7
10 13 16 19 22 25 28 31 34 37 40 43 46 49 52
5-yr Avg.
'13
1
4
'14
7
10 13 16 19 22 25 28 31 34 37 40 43 46 49 52
5-yr Avg.
'13
'14
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
October 8, 2014
Page 10 of 12
Weekly Refining Indicators Report
WTI
BRENT
NYMEX WTI: 12-Month Strip
ICE Brent: 12-Month Strip
104
104
98
98
$ per barrel
$ per barrel
Energy Futures
92
86
80
CL2
CL3
9/12/2014
CL4
CL5
CL6
9/19/2014
CL7
CL8
CL9 CL10 CL11 CL12
9/26/2014
CO1
10/3/2014
CO2
CO3
9/12/2014
CO4
CO5
CO6
CO7
9/19/2014
CO8
RBOB
NYMEX RBOB: 12-Month Strip
ICE RBOB: 12-Month Strip
275
275
263
263
251
239
227
CO9 CO10 CO11 CO12
9/26/2014
RBOB
¢ per gallon
¢ per gallon
86
80
CL1
10/3/2014
251
239
227
XB1
XB2
XB3
9/12/2014
XB4
XB5
XB6
XB7
9/19/2014
XB8
XB9 XB10 XB11 XB12
9/26/2014
PG1
PG2
PG3
9/12/2014
10/3/2014
PG4
PG5
PG6
PG7
9/19/2014
PG8
PG9 PG10 PG11 PG12
9/26/2014
10/3/2014
#2 HEATING OIL
GASOIL
NYMEX #2 Oil: 12-Month Strip
ICE Gasoil: 12-Month Strip
280
280
271
271
¢ per gallon
¢ per gallon
92
262
253
244
262
253
244
HO1
HO2
HO3
9/12/2014
HO4
HO5
HO6
9/19/2014
HO7
HO8
HO9 HO10 HO11 HO12
9/26/2014
QS1
10/3/2014
QS2
QS3
9/12/2014
QS4
QS5
QS6
QS7
9/19/2014
QS8
QS9 QS10 QS11 QS12
9/26/2014
10/3/2014
3-2-1 REFINING MARGIN
2-1-1 REFINING MARGIN
NYMEX 3-2-1: 12-Month Strip
ICE 2-1-1: 12-Month Strip
27.00
27.00
21.00
21.00
$ per barrel
$ per barrel
* Only 8 contracts available for European Gas Oil
15.00
9.00
3.00
15.00
9.00
3.00
1
2
9/12/2014
3
4
5
9/19/2014
6
7
8
9
9/26/2014
10
11
12
Avg.
10/3/2014
1
2
9/12/2014
3
4
5
6
9/19/2014
7
8
9
9/26/2014
10
11
12
Avg.
10/3/2014
* Only 8 contracts available for European Gas Oil
October 8, 2014
Page 11 of 12
Weekly Refining Indicators Report
Disclosures
Information and sources for all charts and tables in this report were compiled from 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.
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October 8, 2014
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