PBF Energy (PBF) 31 Oct 192019 Q3 Earnings call transcript

Company Profile

Participants

Colin Murray	Investor Relations
Tom Nimbley	Chief Executive Officer
Matt Lucey	President
Erik Young	Chief Financial Officer
Roger Read	Wells Fargo
Manav Gupta	Credit Suisse
Paul Cheng	Scotia Howard
Brad Heffern	RBC Capital Markets
Neil Mehta	Goldman Sachs
Phil Gresh	J.P. Morgan
Matthew Blair	Tudor, Pickering, Holt & Company
Jason Gabelman	Cowen
Doug Leggate	Bank of America

Call transcript

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Operator

Good day, everyone. And welcome to the PBF Energy's Third Quarter 2019 Earnings Conference Call and Webcast. At this time, all participants have been placed in a listen only mode, and the floor will be open for your questions following management's prepared remarks [Operator Instructions]. Please note this call may be recorded.

It is now my pleasure to turn the floor over to Colin Murray of Investor Relations. begin. may you Sir,

Colin Murray

several Good supplemental me Halloween our today President; Web today's CFO; Lucey, Cathy. team. our today's copy site. is A CEO; welcome available call. our of and our Young, With are release, Erik members morning. you, of and management including Happy earnings to Matt other information, Thank Tom our Nimbley, on

factors summary, the it are started, from our the which statements like management's that under filings laws. those provisions on expectations, that press to safe to the to harbor I'd be actual attention today's and statement or many including in getting securities forward-looking results to could safe expectations in Before future, release. express our we contained cause differ harbor your with In outlines statements release covered or by describe the in contained direct federal SEC. predictions of the press are company's call, the intended this There

Consistent which to prior is in million a market related special and $XX excluding sell a land which non-cash net discuss income items. adjustment, will with adjustment our earnings the net quarters, per an of cost third and This after-tax gain lower or our our completed quarter, decreased a includes results we reported share.

while As noted in PBF's operating describing using measures and our will performance results. non-GAAP we press release, certain financial be

refer GAAP press please appropriate For release. the to supplemental reconciliations tables of measures non-GAAP in figure, the provided today's to

I Tom Nimbley. will over turn to now call the

Tom Nimbley

joining and morning, call Good for today. everyone Colin. Thanks, our you thank

operating weak of stronger. strong we benefit quarter, Coast were strong West to our the of performance operational couple but ended Delaware those both of Our able were well, Coast months reflect in the third solid margins. first results margins margins with and very were the of Paulsboro capture regions. for and East much all quarter

shift. starting predictably IMO take hold. quarter, oil coming to late light This a Narrow cracks is the the are fuel started heavy headwind to be we high-sulfur during over to off. but differentials continue with starting summer

high-sulfur Asia alternative backed Atlantic and home up crude calling flows refining trade for from Europe, have bunker seeking IMO. in competing is its fuel prepares for the is has and the Basin sour stopped traditional as the the fuel with been and and oil disposition High-sulfur for disrupted. started into has fuel into and oil raw High-sulfur industry oil materials. market

simple a that make a With the risk sweeten slates fuel. to home collapse new has uneconomic X.X high-sulfur cracks, to an to bunkers X.X no decisions the longer million as barrel the transitions refiners in either need HSFO of barrels or will producing day

sweet differentials widen, to are not fuel pace oil rapid at sour Sour starting that the crude but the has.

more decisions take bit always, As This the physical time lag a are is there will in crude months as advance. a crude made purchasing market. in

can pits. at be for Additionally, crude with the ships deep with and past and the narrow the growth will and fuel. capabilities fact the accommodate sour complex is PBF is converging Sulfur less to that like enemy. matters refiners stated, penalty refiners making sweet will to complexity widen advantage Simply have the be to with sour market an off expected, to quotas sweet sour differentials And extraordinary are year over while sanctions. continuing keeping underway. light have crude circumstances, very volatility production indeed These due sour curtailment, been shale

XXXX. inventory versus This We is was the enter then looks balance the in demand and average, Oil we low term. destocked Inventories year in in gasoline doing the up consumer remain and economy. picking view, of growth five the particular will year. well. U.S. In year-over-year the distillate have for and near IMO. crude the oil, From in in is optimistic general, an market on second is half border constructive cautiously the the

to times I is market operating assets be environmentally responsible to We best have our reliable have to manner. intend a and said to assets our the advantage well. opportunities take many the in run prepared way in of safe,

over results Eric the for to over to turn our quarter. financial go the I'll call Now

Erik Young

PBF you, adjusted an quarter Thank per $X.XX of share. reported Tom. Today, third income

quarter estimates approximately EBITDA $XXX Third $XXX adjusted was million consensus and EBITDA approximately comparable to million. was

third results $XXX XXXX million we prevailing of $XX Our in full $XXX quarter million the At included RIN-related range. to year expense expect million pricing, obligations. RIN

in net with $X.X was quarter billion XX%. over debt-to-cap over cash the liquidity, billion ended our includes of which We $X.X and

generate which in expected, Included figure front-loaded million, our of free than provided As opportunity includes and consolidated which unimpeded incurred us flow. and is $XXX by $XXX five to million more million Logistics. our maintenance in corporate for that million CapEx the approximately PBF $X allowed QX, XXXX planned cash refining run in CapEx $XXX refineries to in

third expected, first of hydrogen than most coker rate with associated As the the our XXXX quarter run significantly tie-ins. was restart and lower CapEx the half with plant spend

to CapEx range. the $XXX million year full million to $XXX expect to in continue be We

forward year, generate As end of we a to low of market cash as assets strong continue and conditions requirements. our we CapEx to look expect result the to flow the free

Finally, Board we has share. of are per pleased to quarterly dividend $X.XX approved announce a that our

I'll Now Matt. the turn call to over

Matt Lucey

Thank Erik. you,

our quarter. total Our assets delivered barrels assets XXX,XXX averaging ran per a the day. approximately well stated, throughput Simply during

in system ahead, good Looking is refining place. a our

ready Tier are All X. of our for assets

of PBF As circuit we the IMO. has seen regulation. result for pattern changing already stated a as flows the well-positioned are earlier, of

are seeing straight basin crack of availability run and We more high-sulfur stock. Atlantic

conceivably on barrels our system the XX,XXX quarter. double availability, during throughput currently and with HSFO to running slates. are We Based depending volume ramping crude pricing on up fourth a day in that could

with we'll went We believe forward Philadelphia the Coast product improved shutdown as are We see refinery. from the product Philadelphia realizations East of seeing relatively to market going the balance. dynamics the long improved on

Chalmette on and prospectively if made coming today as market good process ago. and the It as did when coming better exactly are a up in it coker is that the investment than we time. decision. starting looks on right made the decision our year completed The and budget speak. at just project not on Finally, The time in the budget. is we on We projects. believe about the on on of we time was investment We with coker

Chalmette, our the at completing we year. Initially, maintenance of for last are bit

in hydrotreater, well the a X,XXX approximately change per of are that feed as a day. our midst cat as yield great small project finishing product by We the catalyst in increase clean will barrels

products. the additional of that project high additional By come we plant progressing we hydrogen to hydrogen quarter. sulfur end Our run able adding low-sulfur capacity inputs and first and will also at at volumes City towards well, Delaware is online of to the Delaware, expect be produce

pleased of we of a to with agreement Air effectively that came South review Quality Coast alkylation On District, the board win-win the governing in the are ending California. state regulatory front, the process the we Management

Lastly, continue acquisition Shell with completing to refinery. we the the of closely on work Martinez

transaction are and We that XXXX. regulatory other now progressing the And the pending we through second request close the from approvals, of first anticipate information quarter during will FTC.

to questions. With that, we've completed our be opening take remarks. would some Operator, pleased we

Operator

[Operator Roger instructions] Read Wells go question first with ahead. Please Fargo. from comes Your

Roger Read

it if guess if I'm with write okay refining, I is title ever Tom? we you, that's a sulfur about going enemy, the book to

Tom Nimbley

get a -- make [pay] it. That's sure for just I

Roger Read

and the very that to from lay an then. being financing I there's dive questions a wondering, obviously, XXst, probably there we or last all maybe attribution for you that. first in are a of which out Jan been right, guess Are balance Martinez out the quarter. the least able closing best All so XX, comment into And And the timing. we little address was Matt help March about just there on to thinking at I Eric, sheet can And one perspective. laying, us thinking about was we forth?

Matt Lucey

own timing, regards with with FTC, the just the we request first the it's process. have our My In it's would by is that to deal regulators, not and not it, first the we But we've the the of that control. in And driver to its be from in or been driven second midst in of expectation Shell, again, PBF time. is the of half does unfortunately, dealing reality specific completely the the quarter. but take being

have we been. as today bullish as are We

XX in right it as as absolutely quickly getting is possible the So story. the

to our follow changed want changed. regards has don't if nothing's to you announcement. but from comment nothing In I financing, original can up,

and strategy right we with in line expected. is our where generation fact, In coming cash

only a being turnaround. having conduct that is run the of Martinez recently news. aware is should going which with the Martinez to, by better is was were clean only than not thing we in work a the be advanced to market We That up have Shell, The other XXXX. announced reimbursed very for but So thing the to good nothing transaction. is

Erik Young

last then and the laid on plan I follow market second side Matt's things, this out think of us of subject the on reaffirmed low market those bought would conditions, still comments. having to on XXX% result year just we CapEx. of conditions, that a into the in that ultimately a up originally the in call, We put very June to position absolutely are as half financing

flow. long right we the generate third here in should quite step As direction cash first be run And the as free is able for well, significant frankly, to quarter we really us. the

inventory going I third during throughout to right of CapEx there're that's the step took be the working and came that, that reductions. say we around reduced that fourth first Again, building we million flow system, into capital couple to on from So capital operating quarter. Of lots of which a a prior the in rebounding. is $XXX and then dollars inventories plan What quarters. that on of third plan, was of I think come of the of the know year really is And that had during working would executing we are out of laid hundred overall I direction questions the end a bulk cash million. we big north of the should half back

Roger Read

like to really start just We're multiple going to companies effect a really they're hit IMO. sounds the hearing seeing things follow-up. And It then with are that solid market. from maybe as the quick be

in But view is to expect point? first take need attention should year, need loaded normal of months to of sort maintenance, be you we this be of scheduled paying that Or think you advantage take and you about below 'XX, the you situation? the I'm something curious just at there 'XX. so six the to maintenance again to to an next front do able As as well you wouldn't end initial of way your in

Tom Nimbley

and The first FCC will Toledo. biggest thing that block execute turnaround on a scheduled quarter a the in we at is is

it at Toledo light, look really under you is special If from IMO. insulated a

will So the we turnaround quarter. be relatively large in of end first Toledo at the doing a

year of As run to to able capture six we high Matt that for the when month be runway margin on impacts. first continued closed the environment, rest think Martinez rates our to we system, because utilization And deal. said, strong that be related will of what expect clean first a we have complete period, we half during IMO

Operator

go question next from Credit Suisse. Gupta comes Manav ahead. Please The with

Manav Gupta

Congrats It because this at cash on deal. just a but the a flow free unfair May rail call is a little over go strong know Martinez will long supporting of the heard I at bit the now approving day. way end question, stated that in curtailment we its first happened the very Alberta deal.

Canada. How rise just So the would XXX,XXX, out if barrels market. hitting your from U.S. to I'm respond additional system XXX,XXX figure incremental to those it? to production start trying will

Tom Nimbley

day And -- rail, combination in of from a crude the fairly a planning Frankly, is that's Canadian an of heavies, incident. by we PES are a fair XX,XXX outflow now. speak. also running way, still run significant unfortunate that's Bakken. We we we amount barrels then a By right are as

getting now are some there. in We were crews at processed that being of those PES

today. what just that's we're So running

into that to and XX day XX,XXX announcement, of producers. We go Government, expect be quarter and and that most the rest about north we prior barrels somewhere been bit run touch between the of the with in a were that rail constant in would thinking was XX,XXX the the little we light XXXX importantly, NEB in heavy. and We've would going be as to Canadian maybe the have a to crude out to -- what fourth and

in discussions. So we were actively

With of it's would barrels, sour to good I we this, have down because weeks. Delaware, will addition for waiting give I'm crudes procure distressed a because barrels it barrels both at for in recalibrated because there, going going telling these to it additional to system. to expect we we believe can distressed more bring expect announcement it's it us the you what will And perhaps last two was or Chalmette. unload are two Again, this further be come we capability and -- into heavy coming reasonably -- -- in to in we out the for it imminent positive into price latitude crude, for the thank this weeks, and last

Manav Gupta

question, expectations. actually quick little you A was ahead regions Three in if West the this refining came Coast a the at look quarter. of light. of our

something just on given And I'm to towards margins? XQ? thinking spike the how in Coast off this we So trying West that saw you in was the start understand of if the for Coast West capturing quarter, about the spike you're

Tom Nimbley

right You're it. on very

history two first and the if the The operating West first scheduled we as lackluster, Coast we least. this to the of lot into you months maintenance the say quarter year, and a here quarter, The of Coast, second of just margins the problems third replay were recall, the had West end of quarter. in

problems passed. to very run of high third the utilization in people capture responded quarter, And As in we parts the are and cracks early negative -- it margins. a way. Those had operating happens, the a usually third the hard

losing it to Torrance. to wind at big off being did line we was that an third as It but operating on the days up a production, a preventive have And unit, done the margins of and some the three tripped end starting did hydrogen was significantly. quarter, start the about maintenance hydrogen unfortunately where unit were in rather recover there we recover and problem

obviously superstitious, it is Torrance we a volume again good the and to October. back. the correct look came as had started of cracking equipment quarter Now we Halloween, at good the very in where have some month fourth of this We I'm throughout operations as but had

operational look fourth good. three days, to the reported gotten And some been have we relatively quarter very there's the problems. However, cracks, over last now a and prospects strong

Operator

comes The ahead. Scotia question with from next Paul Howard. Cheng Please go

Paul Cheng

you fuel it that result it, just you're guys XX,XXX you one And or using or test to does us high-sulfur running different? or just differences, it coker coker when think that r the go X in or one? no oil? really and Tom the oil tell some also barrels already X to loss heavy in is it one You that heavy barrel about up replace or any you're replace a o make product the I any the just do to to And low barrel yield you efficiency technology? can of talk anything, fluid running oil, Can everyone Matt, whether you does you day. or one difference,

Tom Nimbley

Okay, sequence and all I'm going don't to I me. if try them get in come back at

of First

all, heavy advantage reactor you the capacity, too is if portion there how fuel is feeds will of slight capability -- it's limiting not the for coker. in a fuel a coker hydraulic go into directly the run fluid run hard which fluid can difference, to Delaware There also that the time the we our is oil the coker. directly split chews of particular up have without most your available a technical, half in agent and it is that to you the And getting oil that coker huge. and or basically

also a the that that material But fluid oil. can to allows flash the as fuel cutters are coker put into unit heavy part in coker, another in off the some and you lighter scrubber, processing that the products, of called of you

put reactor. out and So get that you don't in to a it effectively, have you

much is putting delayed On back a you're the coker the of if crude, as a take So but have don't the you're crude going or directly, pretty already coker, to from much you full. resid capacity into coker out debt. stuff

of the Well, of can type would very a if significant, really the piece the back running, out fuel out? is running you heavy very Maya fuel we're type you're e., crude be such not question, ratio a of importantly, is say we is, heavy that yes. if gets a and and to running most upon at this your -- decided back run crude. crude running There and Maya, high-sulfur oil Chalmette, be we are of second a want crude, depending the into oil all Now bunch because unit there think I related i. you're

on certainly, and hand, If would maybe be backing full a the and you there your then your back MAR medium ratio. out have would you bigger or out was crude unit was were our in coker full, other

crude Finally, are the have quality fuel basically, of getting way put And and the want that's buying if you would of I'm analysis to you that are to but back the the crudes just ratio there what what you versus will there, oil at of there. Paul, the way and running upon it the to is, look out an gravity be crude the depending do. gravity in into unit, economic oil the is you're a

Paul Cheng

are run running into And directly coker the distillation guys it tower? crude you and you mix through with your it that the or

Tom Nimbley

going the run into cat unit. the Matt Chalmette, crude and run some we're it's of on our the oil refineries, of have and case, close heavy that's we because tower, barrels run not refineries, in that we we'll material and heavy said, is going through we a getting are. through, bypassing as running, In doing Both, unit. coker Coast, East crude running other a underway it and are turnaround today to of when the capability In can we XX,XXX now, right to we oil, initially feed that the any we it, fuel day fuel have particularly hydrotreater. a the run in We're directly the

Paul Cheng

on rough look pro from forma may question me, final And basis the any CapEx, like? a XXXX estimate

Erik Young

anything. on Paul, I approval We've the through yet XXXX not still we going budgets. final Board are from an think got

general times some annual we're on is third on number in of refinery CapEx. of have there turnaround that And portfolio, bit system you we a see today the at million related would going But two-thirds XX where is a to anywhere based number. that's circa that on on about is probably longer-term high a the say forward. of five fluctuations an we good what $XXX low Depending XX should that and pretty it be turnarounds, premature. maintenance. off be it's So going may But timing basis directionally, or we

Operator

with comes ahead. RBC. question Brad Heffern from go next The Please

Brad Heffern

the into to all, RINs on and on SREs I I deal, the wanted go we trajectory on sort back any thoughts your RINs. of touch of pool? hoping First of could get thoughts the RINs as

Matt Lucey

last administration negotiations to with at committed doubt is no comments, the the my other at impacts that. softening China, with that all working this with macro the community of and question the But no of quarter maybe reasonable containing there Consistent and going they've of present blow that is things I RIN on prices, on. the ag and a is done administration some job have

continuously are very of a centers reminded vocal. They by have large who been group

more be the And I same. of it's to think so going

been not sight think and think But community, predicting. that I I as market there's fact of EPA they RINs letting that actions aside, that were appreciates to draconian lose that address see I the concessions weren't move, this you'll to it. is some administration generally think putting think by that more committed to they as the I fact,

Brad Heffern

yield while, crude guys East just and have light for quarter, looking much at this then I've seen quite runs And you also highest then had than a normal. Coast you distillate the the more

two reasons Philadelphia for those to mentioned you walk But Energy volumes. through potentially you can things? the side, the due Bakken crude light the think I Solutions was just

Tom Nimbley

think it's case would that heavy light existed. We tight combination. given a switch base differentials in the I the

in commercial benefit, still. were and a and higher some that and unfortunate the a particular, few bonds running Delaware, in crude, picking light light in PES crude negotiating the slate, the result high the did distillate people added that we've other ex lube as of had from Bakken then for some benefit factoring the the light PES, water relatively been yield. in product, Paulsboro But incident indeed So in at of and well in we that which resulted up crudes a

are is or I switch that because point, high point, not the a is want sure -- one. on crude want to was do have a from that When to Paul's sour make just it make lighter Delaware to question I a in naphtha slate make because time to that yield. medium to this fuel, blocked and of oil people to they be everybody going we it realizes whether on crude, to much just could to making want facing good was maybe Delaware a sulfur the how not on City, back lightened one I'll crude fuel run kind by up

and people just you do folks you so think it's to see that, going And forward. that to you're that I important as effect for as go monitor

Brad Heffern

proceeds maybe you that Torrance finally just just and quarter. from Can what the sale plant then were? the what during that for about Eric, And was, talk potentially the

Erik Young

Yes, This it's strategy the laid out. roughly consistent $XX proceeds. that is we with million of

converted land had with will use previously. around I be of that it anything ancillary commercial sale think Torrance and not in into the we ultimately These to day-to-day are type operations land there. small another has land at of probably with alternative some associated parcels do really plant,

Operator

question comes next Goldman Please ahead. Neil Mehta go from The Sachs. with

Neil Mehta

first for market? you I the I term been And of guess loss since long wanted East the couple Philadelphia question, on on gone of capacity Coast see my down. the thoughts has implications months your it's a

Matt Lucey

look down a to at you X break when PADD Yes, it section. can you

day you by where close RX at a was, So you when obviously factually of product and you barrels local have refinery have RIN XXX,XXX reduce the Philadelphia throughput. barrels where trainer to you a basin XXX,XXX production total Philadelphia refineries, day clean

And local make so and production have way long, its Harbor, to case so anymore. York the New barrels up that's that the would environment not marginal simply to went was where

Harbor business seen New into We've decreased, our our York has and positive. have And all increased rack disposition that our is improve has volumes our particular increased, up. Laurel market into which have as so tightened sales

flows, anything than different with no the in market Now things time. do physical else these take

different or need customers change over that with You time. wholesalers have contracts you different to

further X has all improved. it's directionally, we away. because But to PADD X within So places is believe PADD input more And our positioning require nothing instant. from going then improved, is absolutely

Neil Mehta

follow what you I the now out, capital on the north would of is The it. don't quarter? issue just just, up missed is, And given if latest just see working a you $XXX cash the need can this, equity for want in But was sorry the Erik think are call confirm. the balances need to swing to thoughts million, answer

Erik Young

Sure.

We will go in reverse order.

cash I are earlier flow know out comments, the conditions on consistent laid the with very that this year, replenish the think half position line generate able essentially us we close a you in We're executing thought with be we deal. second in the be we we to point balance that would based we system. and put the plan on market cash to to significant free the much still along would where at

in $XXX we which million increase inventory associated And of the think with ultimately third frankly, I quarter drove quite working being almost capital reduced. reductions, saw inventories

from bulk So comes that $XXX down overall, inventory north vast working million reductions. but capital the of of was

Operator

Gresh with question Phil comes next Morgan. Please from ahead. J.P. The go

Phil Gresh

Paul's should follow-up continue when a right slight versus fuel obviously, a And you're first weaken. Tom, my mentioned think heavy talking I be oil to there'd just The that question question benefit is more to now. is oil you to questions, crude. fuel doing that about

timing point? one-for-one And there make effect weaken be of oil for as the incremental continues So every than fuel oil of crossover is faster be heavy a a days, of if to diffs capture that fuel should that of kind heavy we dollar more fuel crude and sense? would kind versus weakening, that if doing then there diffs oil

Tom Nimbley

Maya, or crudes, oil widening as the but diffs, think, starting crude other I of the clear. to the sours depends We between Yes spread it say, the it the the some as now, of -- the fuel diffs or to crude running crude don't obviously, to in, it option it's rest have or to crude very is. heavy unit fuel to the sour medium we're coker. whatever oil Right see crudes, get on still coker particularly on not the are economic

economic. clearly that's So

in would go is what as to is high-sulfur another though leg the And we we're My am is but really likely and I down reduction sulfur and is that, -- sour, for view fact just heavies for the it getting or it's enemy if fuel. be of the reason. always, see new in of indeed the the rid market forward, light requiring to sulfur that only fuel I there content the losing that oil not an a oil, exacerbated. going or is, high-sulfur said sweet -- fuel on XX%

sulfur gun here. really under is So the

widen we So to, expect those those differentials crudes to out.

you unit, of then have will you looking and have that running let's things. it's value going barrel And the complicated, just of crude because it -- other to And that. all be are at that through are if one barrel say one going really going run oil, crude be it's function you to to fuel at the of gas you're crude a want an ongoing to a be analysis out of economic, fuel just then also you it look to very you run And simply simply Basra. economics and your are light oil. is you Basra you to of going oils run And -- actually back quite of and more than to

So it's it's going entirely for oil simple crude to okay, complicated. an every not because you're oil, dependent running. barrels interesting as time. of what to X.X crude out say, the It's very of barrel back It's that able upon fuel being as we're

Phil Gresh

the PADD the thumb, rule But up in but from come month that's two, just know, My complicated. with kind second of appreciate, process just that refineries of past with to some trying was or I here other Martinez. several obviously, question is I in is focus would opportunities you're the in or of to Martinez California. primary of are or pursue point? And Thanks. market gauge at proposed PADD interest say and you the in your to continuing outside just your in Martinez, X X this I market wanted other outside

Matt Lucey

other Yes, We on I and are selling, people on on and Martinez. Martinez question we're is on we're think potentially ended the and what right the answer, you focused never Martinez. with our the focused or but question that's selling focus started comment

Operator

question with Matthew next Holt. Please comes Pickering, go Blair The Tudor, ahead. from

Matthew Blair

recent how a your well seen We've in earnings increase talk Could fourth about rates. as the in quarter that you might affect tanker XXXX? into as

Tom Nimbley

but congratulated Yes, some that obviously external the questions putting attack Saudi facilities. not the what that. have ought were to And the lock have it But I regarding influences taking sanctions is to with rates course customers Saudi's on might think to first then impacted incident, that. and the they successful and response during the their on stable. that steps that on only add customers a they be that protect their to again, and the of incident effect whole effectively I keep exacerbated that for and market did

that and is down down. We think calming calm will

think are our also system, Torrance and you now look and refineries we've Toledo five We in supported effectively right got if at pipeline refiners.

domestic significant into Gulf oil And crude of crude. Canadian crude, East we're obviously, Coast Coast of that We our amount a amount fair by -- bringing rail crude have runs system. a Chalmette

waterborne exception Coast, South whether system at running are effectively crudes America, balance So Latin with the in in be they'd Chalmette, short the haul the one you of system, or -- predominantly. America, and look crudes we that our East the are when our rest from

of course, if Paulsboro, The running either that or from insulated of to crude have Asia. relative have but we percentage think or high in a one Europe we're somewhat a who's higher Saudi running sweet crude, foreign we we a is, for somebody conveyance sour area contract which we're

Matthew Blair

year. with Cracks naphtha Tom, you thoughts into been then, less be weak XXXX? this Tier blend coming on think appealing full any stock have effect will in gasoline into a X naphtha Do And XXXX? pretty

Tom Nimbley

naphtha don't it's going soon. is likely do, sweet run There the pressure be some steps. of simple crudes I going the sour to refiners I -- to to need see more went away as very anytime question. a conversion good have were Actually running where take crudes

into You up, competing NGLs in petrochemical coming have that. this naphthas that with are the pentanes ongoing that the increase tremendous coming are They're and business.

to into gasoline. with be The gasoline distressed tough and think to this situation market And generate what think it blend is run to going But naphtha going the the a with pull it. going that naphtha But It's bottom-line are and octane to up you to able longer. wind you I then full reformers pool. you're order directly have continue. to get to continuing I into I in with to lands, do your that's about

Operator

The Jason next from with ahead. Cowen. question Gabelman go Please comes

Jason Gabelman

up the wonder for $XX quarter, on kind strength then any like a did you benefit And through the come gasoline seems to quarter? we quarter. the market the following benefit capital holding is seeing looks year-over-year. like continue? working I and market crack is fourth It you that in of all as in what additional Do this barrel just to Thanks. higher you're or it expect if a up the get you here expect pretty it into winter well what from head

Tom Nimbley

but demand, the scrubbers barrels go of that take question. high light of lower is back that a market. because again, -- first surfer there will X.X some of stays, disappearing product a in fuel million of X.X an day light million increase as day. barrels demand Obviously, is I'll be I IMO And of to happening a this with what shift oil sulfur

fuel, think it's analysis it's going I go to jet and spectrum going spectrum. of Again, analysis just the diesel. an an economic across gasoline be and to

some fuel back price And to de-converting you or have strong then takes And is could if of there of But you're gasoline end have gasoline frankly, place. prices. if the that to shifting will goes cat low, things then be yield low you're that cracker distillate, equilibrate. likely the -- goes because in going obviously the to tend jet

in because whole make light of that what's think that product IMO if sense. across there's the system, happening a we with fact benefit So

Erik Young

from we during was capital the than million more which quarter, driven working $XXX bit over to second inventory. was a we again, capital, bulk working And The just in the of generated reductions that, reiterate, anticipated. by on originally vast

go back I it through decreases so, be fourth as we we of remainder think material we've footing level shouldn't gotten And see the in inventory a quarter. where the on really to inventory wanted our and

where now go. product driven AP and really AR the from crude and capital prices price standpoint Working be to by an is

So system ultimately, bulk capital the back during bit piece, third working the was a materially the is we've our in reductions, of coming received we to I driver think But can the going be, fluctuate of quarter. quarter-to-quarter. inventory biggest the which vast message

Operator

America. today The final Bank Please ahead. question with comes go from Leggett Doug of

Doug Leggate

Tom, any so, follow changes starting ups the to would there? relative about the take Martinez? hopefully. once Martinez, to in what's see sweet meaningful Are quick specifically of look And specifically you you two that to year. if you to heavy you to try have speak pricing you to feedstock just I Are as about if how next adjust and complete and wonder market. could happening move you thinking possession crude I I'm -- see starting Coast West feedstock

Tom Nimbley

there's will, the you crude more of are that explain. let and we're products, sweet Actually, of what of area. the runs out. a if amount in stable. seeing same of significant is me the valley a that from are that's heading light, Martinez on we terms amount and or that or Effectively, crude Coast know, sulfur some the remained things crude that we're as from running, And significant light that the coming you relatively heavier the West And run the prices a heavy on

diffs the little bit. ANS actually fact, have to a up widened In

is seen actually cat quality a cracker the the high meaning bottom thing coker, low And selling even the at density, the because the that's rather from of oil we've its it's because if resids, really ANS. product value of is sulfur. the of fuel which resid refinery of to we slurry, content BTU premium a Torrance and cat fuel, into and now the But the is were some or don't real interesting, from that go some you the

really far, seen seen some in side change fact, waterborne crude anything widening it because support haven't it by -- then obviously, we and the lag that's We and we've versus freight. haven't heavies on running economics the and out seen first, the domestic the product of

Doug Leggate

of and one seen not MLP, limited for going your about forward. a to that large of of bought it'd several me fallen leave just going look go MLP. back the think ago, whole you've role MLP. your change this, seems curious about the I opportunities, today. broader as their putting at how you. I'm have anyone's you out the favor. part but MLP, the years together be growth But [Valero] to committee I'll of asked completely system? guess given to topics back sector to and Thank or don't relatively whether Forgive I I'm their better Obviously, about see it special competitors talked there.

Matt Lucey

continuously But frustrating has prospects our evaluating The that in, in we and our And we're strategy very market and that purpose delivering been the us PBF MLP MLP a operate which are the good, it. for to continuously the has absolutely family. evaluating MLP evaluating we market the us. market MLP on. market, PBF the laid for served are are we've The the and out the for is we

so And of with we're continue front making comments, a the been and news for out but to not But we evaluate it. certainly it. laid the any companies, positive of suite these strategy has MLP in will net is our

we we'll go continue static forward. as to is evaluate and nothing So

Operator

to now This does closing remarks. call like for Tom conclude I the the to session. over Nimbley would question-and-answer turn

Tom Nimbley

another you. interest to and call look fourth very at Thank end the with your forward We today. Well, your having quarter. of the you attendance much for

Operator

for program. today's Thank you conclude does This your participation.

disconnect may anytime. You at

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