* ULSD 70/30 data is on page 2 OPIS U.S. Gulf Coast VGO Values (cts/gal)*

Transcription

1 October 2, Day Snapshot USGC Crack Spreads ($/bbl) USGC 70/30 Split vs. WTI ($/bbl) Brent vs. WTI ($/bbl) MARKET OVERVIEW: 10/02/ After some hefty selling early in the day off a disappointing jobs report and the chances of Hurricane Joaquin making landfall on the East Coast, futures markets sold off lead by an RBOB contract that was down more than a nickel at times. The RBOB move lower took the November contract below the $1.31 mark for a brief period before the contract started to claw its way back. When WTI, Brent and ULSD started to reverse course the RBOB contract was able to follow along and trim its losses. November RBOB dropped just over 2.5cts, to settle at $1.3414/gal. The disconnect between paper and physical markets remains especially in the Midwest where Group 3 sub-octane saw premiums skyrocket more than a dime today to 30cts over the futures market, leaving prices in the $1.64/gal area. While not as big a move the Gulf Coast saw gasoline premiums move up enough to offset the futures losses and inch a bit higher. WTI futures started to rally when the rig count data came out. Rigs were down this week by 26 and that turned sellers into buyers. Although WTI dipped below its $44-$47/bbl comfort zone, briefly bottoming out at $43.97 this morning, the market rebounded sharply and closed near the daily high of $45.81/bbl. Ultimately November WTI futures picked up 80cts, to settle at $45.54/bbl with Brent closing at $48.13/bbl, a more modest 44cts gain. With Hurricane Joaquin in the rearview mirror, traders are likely to focus on the geopolitical as Syria becomes a focal point. FEEDSTOCKS: Gulf Coast barge VGO values versus WTI were pressured downward today as a result of a refiner's FCC issues. Meanwhile, some cargo VGO demand is seen on the part of Venezuela's PDVSA, but there appears to be no lack of cargo avails to meet that demand. Marathon has been experiencing issues this week with a 120,000-b/d fluid catalytic cracking (FCC) unit at its 481,000-b/d Galveston Bay refinery in Texas, market sources report. In a filing with the Texas Commission on Environmental Quality (TCEQ), Marathon (Continued on Page 2) New York Mercantile Exchange at Settlement and Crack Spreads ($/gal) WTI Crude Oil ($/bbl) RBOB Unleaded (cts/gal) ULSD (cts/gal) Month Price Change Month Price Change Month Price Change NOV ' NOV ' NOV ' DEC ' DEC ' DEC ' JAN ' JAN ' JAN ' Key USGC Crack Spreads to WTI Crude Cash (cts/gal) Crack ($/bbl) UNL No HS 70/ * ULSD 70/30 data is on page 2 OPIS U.S. Gulf Coast VGO Values (cts/gal)* Cargo Prompt Cargo Forward Barge Prompt Barge Forward Low High Avg Low High Avg Low High Avg VGO (Low Sulfur) Low Sulfur Diff to Split (ULSD) Low Sulfur Diff to Split (HS) Low Sulfur Diff to WTI VGO (Med Sulfur) Med Sulfur Diff to Split (ULSD) Med Sulfur Diff to Split (HS) Med Sulfur Diff to WTI VGO (High Sulfur) High Sulfur Diff to Split (ULSD) High Sulfur Diff to Split (HS) High Sulfur Diff to WTI * Differentials to WTI are in $/bbl (c) Copyright by Oil Price Information Service, a division of UCG, Two Washingtonian Center 9737 Washingtonian Blvd, Suite 200, Gaithersburg, MD Reproduction without permission is prohibited. OPIS International Feedstocks Intelligence Report is published each business day. OPIS does not guarantee the accuracy of these prices. To order copies or a limited copyright waiver, call (888) or fax your request to (301) To have your information ed to you, please send an request to energycs@opisnet.com. Customer Support: (888)

2 OPIS Other Gulf Coast Feedstock and NGL Assessments (cts/gal) Naphtha (Domestic Full-Range) Diff to W-Borne Unl Naphtha (Domestic 40N+A) Diff to W-Borne Unl Naphtha (Offshore 40N+A) Diff to W-Borne Unl Paraffinic Naphtha ($/mt) Mt. Belvieu N. Gasoline ($/mt) LT. Cycle Oil LT. Cycle Diff to No LS LT. Cycle Oil LS LT. Cycle Diff to No Alkylate (cts/gal) St. Run Resid (Lo Sul) ($/bbl) Low Sul. Diff to WTI ($/bbl) St. Run Resid (Hi Sul) ($/bbl) High Sul. Diff to WTI ($/bbl) No. 6 Oil 3% ($/bbl) OPIS NGL Assessments N. Gasoline (River) Any N. Gasoline (River) Out Propane TET Normal Butane TET Isobutane TET OPIS U.S. Gulf Coast Refined Product Values (cts/gal) Waterborne Prompt Waterborne Forward Colonial Pipe Prompt Colonial Pipe Forward Low High Avg Low High Avg Low High Avg Unleaded Regular CBOB No. 2 Oil Jet ULSD OPIS USGC Crack Spreads USGC Prompt Crack Spreads to WTI Crude 70/30 UNL/ULSD UNL ULSD /30 CBOB/No CBOB No USGC Forward Crack Spreads to WTI Crude 70/30 UNL/ULSD UNL ULSD Day Trends (cts/gal) Full-Range Naphtha vs. Heavy 40N+A Naphtha USGC Jet vs. ULSD vs. Full-Range Naphtha (Continued from Page 1) subsidiary Blanchard Refining reported, "The Fluid Catalytic Cracking Unit #3 (FCCU-3) experienced an upset and depressured to the flare." Emissions related to the event started around 4 p.m. Thursday and continued until 1:05 a.m. today, according to the TCEQ filing. "Operations brought the unit to a safe state," Blanchard Refining said in the filing. However, the ramifications of the FCC issue were still reverberating in the market today. Marathon was seen on the sell side of both HSVGO and LSVGO as a result of the Galveston Bay issue. Some market participants reported Marathon also offering 0.8% sulfur VGO, which is technically MSVGO. Meanwhile, Venezuela's PDVSA has tendered to purchase two 300,000-bbl cargoes of LSVGO, for delivery to El Palito in windows of October 9-11 and October Bids are due Oct. 6. Market sources say PDVSA may have to revise the October 9-11 delivery window since it is fast approaching. IN GASOLINE U.S. GULF COAST gasoline buying was seen with a vengeance this afternoon, pushing basis levels sharply higher and overwhelming the losses from futures. There were a couple of refinery blips that happened that could have helped drive the market a little higher. CITGO's 163,500 Corpus Christi, Texas, plant was forced to partially shut down an FCC unit at the facility, according to a filing with the Texas Commission on Environmental Quality. Phillips66's 260,000 b/d Sweeny, Texas, plant saw a "process upset involving a furnace," said a company representative. There was also an issue today at a 120,000 b/d FCC unit at Marathon's 481,000 b/d Galveston Bay, Texas, plant. Prompt 11.5-lb. RVP conventional gasoline treaded water for the most part this morning, with a deal heard at 50pts over the Merc sacking basis levels for a penny loss from where things were yesterday. But that drop didn't last long, with afternoon trading soaring from 3.50cts up to 6.25cts above futures before retreating a hair with several deals done at 6cts over the Merc. That's a 4.50ct spike in differential, erasing the Merc losses and sending prices up some 2cts on the day to $1.4014/gal. Earlier in the day, prices were some 10cts cheaper, with both weaker basis and much stronger Merc losses. CBOB followed suit, with deals done earlier in the day from a penny discount up to a penny over futures, but sources last pegged 11.5-lb. RVP Cycle 57 CBOB (Continued on Page 3) Page 2 of 5

3 OPIS West Coast Spot Feedstocks Values Range (cts/gal) Diff to 70/30 (cts/gal) Diff to WTI ($/bbl) Diff to ANS ($/bbl) Low High Avg Low High Avg Low High Avg Low Sulfur VGO High Sulfur VGO Light Cycle Oil* ANS Crude USGC-to-USWC Arbitrage (cts/gal) U.S. West Coast LSVGO vs. USGC LSVGO USWC 70/30 Split vs. USGC 70/30 Split OPIS USWC Crack Spreads ($/bbl) * Diff to L.A. ULSD USWC Prompt Crack Spreads to WTI Crude 70/30 CARBOB/ULSD CARBOB ULSD OPIS USWC Refined Products (cts/gal) Prompt Forward Low High Avg CARBOB ULSD OPIS East Coast (NYH Barge) Refined Products (cts/gal) Prompt Forward Low High Avg Unleaded Reg No. 2 Oil Jet OPIS East Coast Heavy Fuels Products ($/bbl) No. 6 Oil.3% Hi Pour No. 6 Oil 1.0% No. 6 Oil 3% (Continued from Page 2) 3cts beneath conventional gasoline, or some 3cts over the Merc. That's a 3ct pickup from Thursday, which was just enough to send prices up a half-penny to $1.3714/gal. Like conventional gasoline, earlier today, CBOB saw prices dip toward sub-$1.30/gal levels. The back-and-worth nature of the market caused line space for Colonial Pipelines gasoline line, Line 1, to move around a bit today. Deals earlier in the day when the market was weaker were done at 75pts and a penny above tariffs, but this afternoon was heard back down at a 25pt premium to pipeline costs. That's down a quarter-penny from yesterday. Line space will likely remained subdued, though, with today's push to higher ground in the Gulf putting Houston material around a penny more expensive than New York markets. The Midwest, which continued to see red hot prices with a slew of refinery maintenance, will likely see more Gulf Coast barrels flow that way to catch a profit. NEW YORK HARBOR spot gasoline prices pared losses but still finished lower on Friday, as weaker cash diffs compounded paper futures losses, thanks to the latest projections that Hurricane Joaquin will not make landfall on the U.S. East Coast. On Thursday, Northeast bulk mogas differentials strengthened based on previous forecasts that storm surges, high wind and heavy downpours would disrupt fuel transportation brought forth by the major hurricane as it crashes onshore early next week. Overnight, however, the National Hurricane Center overnight adjusted its track guidance for Joaquin farther to the east, and meteorologists are becoming convinced that the storm will stay offshore as it moves northward from the Bahamas and not make landfall in the U.S. Still, mid-atlantic rack fuel suppliers and retailers are preparing for the stormy impact of Joaquin from now through the weekend, industry sources told OPIS on Friday. Colonial Pipeline Co. said in a statement that while most of its facilities are inland, those locations that are subject to storm surges and flooding are being fortified. The company operates a key pipeline route to transport products from the U.S. Gulf Coast up the East Coast. RBOB 13.5-lb RVP winter-grade gasoline left the board at 1.85cts/gal above the November Merc, the midpoint of heard bids and offers earlier. On Thursday, RBOB diffs traded as high as 2.50cts/gal above the Merc before settling at a cash premium of 2cts/gal. Outright prices settled down 2.54cts/gal, at $1.3599/gal. CBOB 13.5-lb. barrels ended at 2.15cts/gal above the Merc, or 30pt stronger than RBOB. CBOB's cash value finished 2.15cts/gal lower, at $1.3629/gal. Northeast cash gasoline prices have not been supported by a string of recent refinery issues in the region due to plentiful inventories and questionable demand following the summer-driving season. According to a regulatory filing, PBF's 190,000-b/d Delaware City refinery on Tuesday released "about 105 lbs of sulfur dioxide from a 4-minute flaring event possibly because of start-up issues." The company does not comment on refinery operational issues, as it treats them as business confidential information. At the wholesale level, some gasoline marketers can find hefty discounts at certain Northeast locations. According to OPIS data, some of the most aggressive discounting (Continued on Page 4) Page 3 of 5

4 OPIS Feedstocks Pricing While vacuum gasoil (VGO) volumes transacted in the U.S. Gulf Coast spot market are not expected to exactly match the VGO specifications outlined in OPIS feedstocks methodology, the OPIS specifications serve as a benchmark for making spot assessments. VGO with materially above-average qualities (relative to OPIS specifications) would be expected to command a stronger price, and VGO with materially sub-par specifications would be expected to be discounted for quality. Depending on the extent of the quality discrepancy from OPIS specifications, OPIS may decide to reflect VGO deals somewhere within price ranges (near one end of the range rather than the mean), or OPIS may decide that the qualities of the VGO in question are too far removed from the outlined specifications to be considered representative of spot VGO values. The full methodology for OPIS assessment of U.S. Gulf Coast and U.S. West Coast VGO, naphtha and other intermediate refinery feedstocks can be found online at < Editorial Staff Brad Addington (NJ, USA) Diane Miller (NJ, USA) baddington@opisnet.com dmiller@opisnet.com Yahoo: brad_addington Yahoo: dmiller_opis Mary Welge (NJ, USA) mwelge@opisnet.com Yahoo: mw_opis Jiwon Chung (Singapore) Charles Kim (Singapore) jchung@opisnet.com ckim@opisnet.com Yahoo: jiwon_chung Yahoo: eyury@ymail.com (Continued from Page 3) can be found in Wilmington, Del., as OPIS has confirmed sales at more than 19cts/gal below the OPIS low. As a result, reformulated gasoline blended with 10% ethanol can be had at $1.434/gal, versus a rack average of $1.654/gal. OPIS notes that the aggressive pricing in Wilmington might attract marketers south of the city and perhaps to compete with Philadelphia. However, the discounts are not likely to draw marketers from southern Pennsylvania and New Jersey after factoring in freight costs. In GROUP 3, prompt delivery "V-grade" sub-octane gasoline changed hands between 21-30cts/gal above October NYMEX RBOB futures, rounding out the week at the high end of that range. That last deal lifted cash differentials by 10.50cts/gal on the day, negating Merc weakness and hiking outright prices by 7.96cts/gal, to $1.6414/gal at week's end. Spot trading levels finished the week at their highest level in nearly two months. Any-October supplies were last gauged at an 11.50ct/gal Merc premium. In CHICAGO, October cycle-one CBOB was last talked at 32cts/gal above futures, 4.50cts/gal weaker than yesterday's finish. That weaker offer teamed up with Merc losses to sink outright prices by 7.04cts/gal, to $1.6614/gal at day's end. October cycle-two material, set to roll forward to prompt over the weekend, was last assessed at 29cts/gal above futures, 3cts/gal weaker than current- timing barrels. Prompt Windy City RBOB cash values melted 7.04cts/gal, to $1.8114/gal at closing, as barrels maintained their 15ct/gal premium to CBOB today. Currently, Chicago RBOB is the most expensive spot gasoline barrel in the United States - more than 35cts/gal more costly than similar supplies in the Gulf Coast. IN DISTILLATES U.S. GULF COAST distillate prices ended the week with a whimper, without much movement in basis and barely a nudge from futures. Today was the last day to book Cycle 55 ultra-low-sulfur diesel into the Colonial Pipeline, which did create some volatility. Deals were heard earlier in the day at 7cts below the NYMEX, then jumped to a 5.75ct discount to futures, only to get pounded back down in the afternoon. The latter half of the session saw trades done from 7.25cts down to 8.25cts beneath the NYMEX. Despite the intraday volatility, at the end of the day basis levels were up only a quarter-penny from Thursday. And with only a single point gain from November ULSD futures, that was the main driver of price movement this evening. Prices picked up a meager 26pts to finish the day at $1.4424/gal. Jet fuel saw a little more movement. The switch to Cycle 56 overnight dashed trading values by a half-penny, with a handful of deals done at 11.75cts beneath the Merc. Like ULSD, that was the main price movement catalyst of the day, and prices sunk 49pts to enter the weekend at $1.4024/gal. High-sulfur diesel also moved cycles today, but the change to Cycle 55 overnight added in a quarter-penny of strength to 13.75cts under futures. That helped prices perk up a quarterpenny to $1.3824/gal going home. Despite the lack of movement in the spot market, line space for Colonial Pipeline's Line 2, the main gasoline line, was last pegged around a penny beneath tariffs. The 1.25ct drop brought line space back to a discount for the first time since mid-august. NEW YORK HARBOR bulk distillate prices posted a flat finish on Friday amid quiet cash dealings, a day after choppy NYMEX ULSD futures trade when prices briefly spiked due to uncertainty (Continued on Page 5) Page 4 of 5

5 (Continued from Page 4) over Joaquin. Prompt ULSD barrels closed at 4cts/gal under futures, the level where a barge deal was confirmed done on Thursday for loading early next week. Barrels pumping into the Laurel Pipeline for delivery westward into eastern Pennsylvania among other destinations loading Oct were confirmed done at 4.50cts/gal, and 4.25cts/gal under the November Merc, respectively. Cash value of Harbor ULSD settled up 1pt, at $1.4799/gal. For the week, ULSD prices notched a slight drop around a penny. Northeast's jet fuel finished at 7.75cts/gal under the Merc, 2cts/gal weaker than Thursday's close. A Buckeye Pipeline deal loading Oct. 7 was confirmed traded at that level. Outright jet fuel prices settled down 1.99cts/gal, at $1.4424gal. Harbor distillate prices have been pressured by a combination of lackluster demand and elevated level of inventories amid high refinery runs. In trans-atlantic shipment news, ULSD barges in Antwerp, Rotterdam and Amsterdam (ARA) traded at a record low differential versus Low Sulfur Gasoil distillate futures on the ICE bourse yesterday amid high barge freight costs among other factors. In the U.S. MIDWEST, ULSD staged another major rally today, driven by regional refinery outages, strong harvest demand and a lack of sellers. October cycle-one ULSD in CHICAGO was last talked at 30cts/gal above November NYMEX ULSD futures -catapulting spot trading levels by 18cts/gal compared to yesterday's closing cash differentials. Outright prices closed Friday at $1.8199/gal, a rise of about 18cts/gal, marking the highest cash values have been since around July 4. Second-cycle October supplies will take over as the prompt-timing this weekend, and barrels last traded at 30cts/gal above futures for West Shore Pipeline material. In addition, the near forward timing material changed hands at 18cts/gal above futures for Wolverine Pipeline material, and at a 25ct/gal Merc premium, for Buckeye Complex supplies delivering by Oct. 10. That last deal was flat with where first-cycle supplies ended Friday's session. In GROUP 3, "X-grade" ULSD for prompt delivery transacted between cts/gal above futures, moving to an 8.55ct/gal Merc discount at closing, 7.05cts/gal stronger than yesterday's finish. That marks the highest spot trading levels have been in around two months. Outright prices rounded out the week at $1.6054/gal, a gain of 7.06cts/gal. Any-October material changed hands between cts/gal above futures. However, bids strengthened this afternoon, placing spot trading levels at a 6.50ct/gal Merc premium at week's end. RESIDUAL FUEL: No residual fuel trading interest was seen on the U.S. East Coast today, despite some buying interest cropping up yesterday for the ultra-low-sulfur 0.3% HP grade, presumably to satisfy some nascent heating demand as the Northeast enters into a colder season. On the Gulf Coast, a pair of deals were heard done for 3% sulfur resid, fob Houston, with prices recovering somewhat from yesterday's losses to register $0.55/bbl gains. In the Gulf, two deals were heard done, both for prompt timing: Glencore bought from Valero at $34.25/bbl and Glencore again bought from Valero at $34.30/bbl each for 45,000 bbl of 3% sulfur resid, fob Houston, for loading October Two prompt bids and no prompt offers were left on the table at the close of trading in the Gulf: Glencore bid $34.20/bbl and Vitol bid $34.20/bbl each for 45,000 bbl of 3% sulfur resid, fob Houston, October Gulf Coast 3% sulfur resid was assessed at $ /bbl. Swaps were last heard on the East Coast for 1% sulfur at October $34.65/bbl (up $0.65/bbl); November $35.05/bbl (up $0.65/bbl) and December $35.60/bbl (up $0.65/bbl). Swaps were last heard on the Gulf Coast for 3% sulfur at October $34.35/bbl (up $0.90/bbl); November $34.55/bbl (up $0.75/bbl) and December $35.00/bbl (up $0.70/bbl). ***Power Outages Hit Pemex's Tula Refinery, PDVSA's Amuay/Cardon Complex Power outages on Thursday affected operations at Pemex's 315,000-b/d Tula refinery in south-central Mexico and at PDVSA's Amuay and Cardon refineries in Venezuela. All 19 units at the Tula refinery were taken out of service Thursday as a result of the power outage. Mexican press reports said one result of the incident was a column of black smoke that was visible from several kilometers away. The smoke first appeared around 11:30 a.m. Thursday, and by around 1 p.m. the situation was said to be under control. Refinery personnel were said to be working to bring units back on line, although some units most certainly suffered damage. The Tula refinery experienced two fires in September. One occurred Sept. 21 following a leak in a heater of a diesel hydrotreater. Another fire occurred on Sept. 9 in the area of the refinery's burners following a leak of an unidentified substance. Another power outage on Thursday morning hit the 650,000-b/d Amuay refinery and the 310,000-b/d Cardon refinery at PDVSA's Paraguana refining center in Venezuela. PDVSA issued a statement Thursday saying that units were in the process of being restarted following the power outage. PDVSA said efforts to return the refineries to normal operations would take place over several days. --Brad Addington, baddington@opisnet.com Page 5 of 5