PBF Energy (PBF) 13 Feb 202019 Q4 Earnings call transcript

Good day, everyone and welcome to the PBF Energy Fourth Quarter and Full Year 2019 Earnings Conference Call and Webcast. At this time, all participants have been placed in a listen-only mode, and the floor will be opened for questions following management’s prepared remarks.

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

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

expectations direct contained like Harbor in release predictions call, on in or release. the started, press to it summary, which contained attention company’s this to press getting future. the your express or the Before outlines today’s In I’d Safe statement that management’s the of statements and

SEC. Our forward-looking differ Safe that securities are statements including filings intended covered to by the describe factors our from to laws. Harbor the be we could many results our those federal provisions actual expectations, cause under in There with

quarters, our non-cash tax reported decreased items. our $XX.X net discuss earnings net a income with which excluding share. is or adjustment results which an Consistent million and our LCM adjustment, This prior includes special lower-of-cost-or-market after we’ll per

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

reconciliations appropriate please supplemental our the date. the guidance today, to today’s press now GAAP provided which the Martinez our of non-GAAP include as February of figures, Xst in in refer release. tables measures press throughput figure, release refinery Also, For included to acquisition

I’ll now Tom over call Nimbley. to turn the

in half solid performance we into the today. Thank advanced with you, operational Collin. extensive XXXX. Good of our which morning, maintenance you following for are the pleased Overall, reflects strategically quarter everyone our call our thank first joining we and fourth regions, results, all

got were our Less significant high fuel shifted trade IMO-based changing industry complex refineries and market their and and lighter. made at mattered Oil refineries. the In complexity the fourth oil to crude’s model changes rate throughout quarter business flow producing changes sulfur observed with dynamics.

commerce so. to some least challenges. in for six importantly, Hemisphere volatile they last continue populated say to oil been mobility organizations markets as the to the mild and have pandemic. and serious areas winter fuels have the Northern The diligently has The the and presented demand world health has more dampened be highly work and weeks, in industry the the with been solve and In heating limited the coronavirus governments

seeing of the or the point, oil life to losses the demonstrated estimated weak do as refining quarter economics. continually have were rebalance. demand the will appears QX. The and can demand demand, starting were to this fairly has runs always in oil – we cannot what but cracks, It will market outweighed rebalance. were With starting in magnitude Global be losses the related it started market due the oil losses curtailed at and though in first it see ignored but this benefits margins IMO that year accurately some even to we does,

The IMO virus seen industry hit, been first not the away. are the quarter. economics presented temporary. had refinery recover. demand have demand current and opportunities pause crisis out and gone constrained balance the has The to remain we the by the are weather but building, been for have sorted by and health from of get inventory button runs Rather, will hampered Product destruction are likely will the

runs. will more Oil than likely rapidly demand refinery recover

of with demonstrate we as the in periods. ended barrels were one. of pick and of peak very light end QX the is seasonally X entering refinery we April, peak it in downtime up Planned million are flexibility. globally. We results unit to period and tunnel per the execute X will as an There Demand complexity to glad is million active assets we day. had planned range crude in maintenance power demand We the set complex our forecasted at

to have highly pleased of Martinez acquisition portfolio. complex completed to our asset the With added February are another very on we Xst,

While waver the complexity on not base our significant we assumption matters. quarter that is first facing challenges, will some

to Erik call over the our financial turn I’ll to Now results go over quarter. for the

and earnings effective just you, Today Fourth to the but $X.XX adjusted was for year Thank share $X.XX as million and an rate reported XX% full $XXX adjusted consensus forward. the EBITDA year. XXXX. was approximately the rate fourth for of $XXX Tom. quarter and PBF use quarter adjusted estimates continue comparable tax per to million PBF’s quarter going XX%, approximately for we

million $XXX by approximately million, incurred refining $X CapEx the CapEx, for Logistics. Consolidated $XXX corporate in for which quarter million was includes PBF and

spend As restart expected, work the the City year, the most the the our QX on Coker with of was of tie-ins. Chalmette Delaware continued successful hydrogen quarter of with lowest associated plants our CapEx and

XXXX our strategic quarter. allowed the in to to fourth decision front-load during unimpeded run refineries maintenance Our

which at As cash from we generate million prior of inventory $XX $XXX ended million a pre-turnaround were more result, than $XXX PBF levels. at in operations million able including in includes year to PBF normalized approximately liquidity, CapEx, We to Logistics. to cash over billion with $X.X consolidated and returning the

Our consolidated net was cap to debt XX%.

senior facility. month, were a and XXXX of on and to February Energy Last used and existing successfully The billion X% balance cash from revolving the drawings due came The refinance Martinez hand $X on Martinez on extend a tenor the credit debt, coupon. of issued a proceeds our notes PBF which portion portion in fund on at Xst. our of to offering this funding transaction, the of closed

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

let’s Matt. Now over to the turn call

Erik. you, Thank

a refinery This the and making fourth add organization first-class pleased our PBF on premier this company. like transaction publicly are I to take to in our was commenting to to the Before we more performance than in and quarter, Martinez time opportunity this would the long to family. welcome

believe gave West we with of we XX.X the – What close perfect strong on historically kit received mean? believe seasonally for We two West Coast, at into strongest regulatory the can market clean on of has have the at to window West industry refineries now what the matter. Nelson has harshest January, highest Complexity as the run been which across of We one approval end produce Coast. a slates transaction the time the us and Coast the market. a now product Our crude combined does that that yields the a

Martinez our machine. in XX% Martinez the refinery, value and product weeks XXX% across have yield of over volume yield. over has particular of the confirmed we strength high two first in the ownership learned has the assumptions on Everything

on We the two Coast. have already refinery to optimize system begun West our

quarter, well. ran delivered over averaging total XXX,XXX back five day per the Looking on fourth overall reasonably a our refineries and throughput barrels

our Toledo which the for largest have we ahead, turnaround, FCC year. turnaround begun Looking our single by is far

substantially to Toledo by with turnaround end the QX. expect complete be We of

but of As circuit of for out refineries out capability has prove benefits may last demonstrating power able to by IMO. or have our have been resid. are our we couple months stated, our pushed sulfur global of complexity the oil well fuel events, been running by the positioned over high PBF The

Given the right to day can across our oil conditions, up barrels fuel we we system. run XXX,XXX of believe per

to run alternative feedstocks will course decision Our of economics. depend on

input always clean We will lowest to seek products. costs highest yield and of achieve the

economics every evaluating day. team dedicated We have countless planning a and iterations alternatives people are of that of

budget project to Finally, and the rates achieved projects, started expected. on coking and in the we November Coker regards on we up Chalmette have our strategic time in

sulfur while products. increased of yield inputs, improving high our Our value overall improve capabilities heavy additional our high flexibility around

high and expect end high products. project to additional near online progressing value plant of at quarter. is hydrogen at Delaware produce The hydrogen the The we that to inputs come and capacity well, allow sulfur more will City us first the Delaware run

successful. doing The are put but We refineries the six responsible needed we will to markets be dynamic, assets. and at environmentally work on are safe, now focused position our to of be the our operations in reliable

questions. ready we’re operator, that With for

moment, callers to company limit follow-up. questions. call requests turn the a we each one all open question The and will In to a that

– with You And additional Theresa take first with may any ahead. from go question go Please the Chen rejoin Barclays. our we’ll questions. queue we’ll

Good taking IMO the made the touch to questions. you evolution Thank about muted wanted you and the effects. morning. of comments for currently my know earlier upon I

you Xst or just it to elaborating, quarter expectations progress some Are waiting a the development? you wouldn’t posts know, ban your like be with development? timeline see goal is second and when we could going you of for, know of mind more March for carriage If of you

Sure.

that obviously has It and point of the the with overwhelmed we real, winter made know we quarter. in the the throughout pandemic. in candidly first by effect weather warm quarter completely and is, believe is we IMO blunted saw and do You been fourth the the demand associated the the combined now, the destruction effects

it’s important carriage is it’s What of frankly, help, think will weigh significant think the in. has cheating couple them going don’t don’t ban destruction. carry here of the I there’s - we that things think I demand a a on right now. the amount happened Mainly to but

well is, things going we’re here. see So to some happens what

in have be to We’re – contained. going over get long how five to the weeks. is winter to virus We’ll takes the it to see going

think contained we a and and knows, I of to in will relatively but resurgence soon, certainly likely more stimulus be some injected that’ll in hopefully demand. see we’re that’s who going China once economy, see

with State of of We’re also are going in coming that gasoline the the happened structural year butanes and California. every already changes out that into that’s some underway

the completely early So happens to sometimes I dependent virus, on is a be but the quarter, would IMO guess see think. what that second would I in that with we recovery going on

same lot out the to was and crude, what said to Matt if some What run maybe effectively sulfur competitors have We economic a peers we of sulfur point. because oil, destruction they high our fuel is, or listened our at on resid. oil. high will ran fuel a at it traded time ran this said, more have amount significant saw demand elaborate We you of

have going to prices crude down sulfur in. high we’re going the economics and feedstock. – we’re fuel oil run high as fuel slow that to running heavy to And going sulfur the Well, swing are of we’re amount back now, oil back come right to

the be the it’ll is. to So to most turn what ongoing take advantage profitable feedstock an knobs journey of

of answer, long knobs a lots think I So turn. to but

contriangulate or kind And accrued anecdotal cargos of exactly feedstock the for the terms clearly, of of market the virus, now do color, how side stress that’s and for to have very in to demand seeing you But the example, in thank long. you evidence it’s know virus? product related Great on any destruction the you. right hard what

a the in United absorbed play because in show run we being looks because on this and over it world the lot starting back look side out. pushed seeing, were already into States. to had the South early, cases. going to are cuts China to starting And of American they’re runs maybe Latin had Early, crude But this movement being that of up and and entire East. out, was some are the was that and medium many certainly planned of like to were the play East crudes States evidence we’re those Gulf of sours runs, in the the the the but of United cuts crudes for economic certainly American, see We the that being throughout on Coast run Coast West like see to

will question go next Tudor, our Pickering, Please Holt. Matthew And Blair come ahead. from with

everyone. so, on morning, there? as if the numbers the run Good outperformed peers. sort mostly It East could and Coast. HSFO the was were some performance about you I to Hey. the that hoping feed, ability around behind upside you margin any you capture? What a you the of talk strong please Was of like drivers could your the receive looks

we terms in to are again it of the describe would able that to complexity. that goes run, feeds I our and Yeah,

oil. in that in run we’re the Canadian which the know, the grades that. obviously oil, Coast catbird to can And achieve well. the as weak when on high happens, refineries that And that form in of two East got fourth can exceptionally seat come wind fuel fuel where out quarter, quite sulfur So you

becomes impacts to it specific very very, difficult from regards do. to In specific grades,

to is, slates We’re not the But get the cheapest to and harshest world. that the in going we can fact run the feedstocks the matter run into specificity. of we

PADD X when feedstocks that presented differentiate know, ourselves go we from opportunities you refiners. so other will those get themselves, And and

guess Coast on what crude the share rail by extending any good. volumes And for quarter? then And that expectations you Sounds East QX? fourth can were in your I point,

level quarter. tightens I Total fourth think a probably we it’ll crude seasonally have crude the off In rail day. second same the to quarter. as we of expect WCS about WCS first would the get the then in by Bakken, by and barrels XX,XXX as the drop And rail was quarter, into between up

you. thank Great,

We’ll of take our from with next question America. Legate Bank Doug

you to day of wonder kick Thanks. think capacity million the expect a of to maintenance macro off you offline. constrained? Good call. million for I you X getting on X can question, morning, because barrels number guys. a threw me mentioned the Tom, remain utilization Thanks I if to

could there’s there compares parts wondered think just go of But off have I just now years? trying if into think out the walk prior figure to potentially if a how us that this seeing what to situation. going moving lot product that’s to Chinese overhanging clean with you the you’re – you and through right enough Now, as we you kind trying to of we’re summer? to obviously,

last Doug it’s that’s Thanks, million pre-IMO. it the in around think down on units which that answer to but of X short great is X A million of fair a question. will down was I’ll number driven period we I are on level X that X million, to is, believe but year, basically, you by a similar be The coming a the lot outside it give planned a I down personally a was taking units a basis. States, million that a of – United that lot being people had

mention, other include thing economic I that The not run does cuts. would

planned as see saw reports how refinery downtimes, that we already cut numbers So unit know, there’s in lots morning now, we’re and that to you I of they’ve back. destruction right addition demand to another has seeing shutdown I think as China in total. much this the the

respond, unit to combination make the But response can’t whole cutting. of I you’re going is industry plus think the going the economic and the start money, planned downtime, to you

the that we’ll balances demand – cover it marketplace. and eventually will lower see that the think I balance So the

up My probably Appreciate is that for follow answer. Erik.

to West all, sheet, how deal about Martinez think the be want how you what That in balance But, getting the on targets, the there? Coast. balance a terms you should of debt for First was Erik, congrats and you thinking guys be deal sheet of closed. where redundancy now big get your do on

public with de-lever we’ve our that of forma post-acquisition cap ticks that Shell. to But in since probably there And been really, we finance are or think to basis, immediate acquired and where be pro went we I that net start that’s we the today. goals of inventory use have working we our think to capital we a our message where times a to may we probably from is will kind consistent ABL business, from the are I portion did in acquired XXXX where XX%. around on debt

the the So at XX%. I the think we is goal were to inside stay kind long-term of that Obviously XX% range. the of year, end in mid of

long-term And start obviously plan are returns cash going six to would that generate consistent stayed XXXX. got this but immediate that’s think of system. I refinery and the as we think has the a message go, of our think significant goal that end to since balance is we’re is, now we’ve use to where We de-lever sheet. be the we year, I

bit, maybe little of clarity. elaborate, Apologies a just but Erik for just to points you asking two

I new assume no assume acquisitions imminent table fund? there’s off the can that we equity and also is additional So

I at executed closed. focus, laser-like we our as the point, ago. that of weeks last a getting focus our couple think was call, in this Martinez transaction on We said

fold, now I continuing lot of business, into think I costs scale ensure right today going place had cap our a we in Martinez ago. have we think to forward. on few long-term structure the a put a weeks have is And bringing focus we and that interest lower our a didn’t optimize that to size we

end the our Martinez go focused And are benefits into to some should and do ahead of to through ultimately, And internally the got the We’ve some start is, and family. we we let’s year. of on so business. ultimately those see operating plan PBF get standardization the

– So answer to the your question

no So new equity –

to Doug, answer and The yes your question yes. is

Okay, Thanks, guys. Take it. got it Bye. Thanks. easy.

from question next Goldman Mehta ahead. our take Sachs. we’ll Please And Neil with go

Carly Neil. questions. Hi, for for taking on this is Davenport Thanks the

like? also, relative saw of forward narrowed about which first mentioned the we key can that one what sulfur talk it feedstocks. The day run on what you XQ? XXXX per you of XXX,XXX resid I high barrels path have discounts capacity as looks just and dynamic And is on to in So think the obviously drivers to

versus So barrels you’ve I XXX,XXX think mentioned? curious what per drove the day the previously delta that

couple things. prices, today you on by what China a that prices is what’s terms prompt weather couple to are back think In a I saying and we’re step price take the regards is affected that. market, and about don’t going think in of obviously reading over and if warm in compounds a Tom mentioned, there not So the last I days a of speculation lot of the

on ramifications it every subsequent and system, know, been through, the resulting, single price impact and through that of the single has every in refining a But count. you can their China barrel its rippled then cuts – and virus through single crude and demand every that ripples resid you

what bringing what you so world micro once the is today, is of is it representative be And I crisis. through don’t will a a think necessarily to focus it know, this

if to increasing currently In refinery another run and the own to amount ability regards ability highly our actions with our that to its simply fuel them. confuse with Don’t our complex prices we because oil. move is the refinery move, running, run high has added sulfur

in market, is, knots would across the and and react the we and the world you world. know, say in serve the the everything going on I shows of on a result of so is And spectrum rest as twisted what’s

free follow-up is out in any impact there post-Martinez? flow cash then around And level curious you Great, just if flow. cash call Was normalized on thanks XQ? just high have very then framing capital And to helpful. the working out thoughts power any

always quarter to year get to a level, achieved normalized every back prepared the end fourth on know, of is back a just our inventory we target. think touched comments, to our you certain level, goal In at the that I getting

as During built accelerated year, through timeframe. maintenance the the end significant first we of were the through a of inventory going we half June amount the of

we million felt capital of year, we the fourth said, to the we that’s like working north to million so balance being form of a of of probably sheet that back on the level quarter. cash $XXX of the the That down towards end And work swing in worth working normalized back inventory our saw $XXX capital. in

maintenance be the So, At volumes, time, us. I may normal periods to capital go through we for inventory will of times same directionally there course be by think only again, where business be are we that’s going working not as affected but building price.

so some seen weeks, inventory price over where future. the those a may well well. And volumes, relatively And impact volatile here six moves we the capital higher lower will continue we’ve to weeks but see into working you as that may past eight have prices period

I business of target ample enough refineries think because making working is are inventory to we position levels into work inventory when the there. ultimately, But operate we to well, our they have cannot have always ourselves want actually safely, don’t where they is sure take do last the to operate capital, ample the advantage markets operate. thing to

So side that’s kind capital things. of the working on of

because focused CapEx. is working cash those we’ve never think I expenses, we’re a terms flow. that on the where go, operating frankly, quite market capital and type in any of control, From going guidance level of can variables Look, we to free provided

We capability, key extremely are the of our that has start now, where like to we have five most would we earnings lot of in pieces importantly, light earnings refineries refinery cracks refinery differentials, complex, of six which we go do the and a system house widening than six see have system. heavy think five The are a probably we we think believe power a to will. more going continued to widening,

Good color.

from question next Brad Heffron RBC. Our Instructions] [Operator with comes

- got I everyone. probably. one morning, Good another for Hey. Erik, some

some guys updated Are think still numbers should of know, updated throughput XXXX the going or Martinez. those But any, expense give You include you we year include do that there Martinez. are at have gave the that the at guides expect you point? to be the us guides to can you I not that beginning

got now I we know, this working And some we’ve to with point, internally operating calendar beginning through probably think out of roll of We’ve refinery of kind month. going plan numbers, expense for coming be And what to things two this weeks. before updated month, to a out. for do next we’re think you ready few under is that had I at end we a the little our the are were XXXX.

some step think insight set I think we our throughput into current be of will was first to economics. to provide where on based try

the release. So we’ve press that included in

how was a And as the got the just guys talked the that or slate, crude give I Was far explanation know, other were you East the Okay, can HSFO at model Coast goes. quarter, as in the then benefit, runs about for fourth that? light you complexity but it. when barbelling against back you any look my highest

that to two, But need was crude actually the light trading, crude have two. United know, tower the we It’s East And to rail of same barbell balance. actually a and the the Brent the plus time, economic one, we heavy by when Coast we to run means, combination the very you it of WCS the of got improved plus States top on Bakken crude, was Brent very so a of amount at run wet. any to you or significant a keep

run. that best we that light crude So became the could

Okay, it. more then And if I just sneak one in. could got

in number. rate G&A that during the think how number on the pretty Obviously, we run it going quarter. and Just unusual there should was Was anything large then a about forward?

have say are run we it so the do is they through because There our are full Ultimately, ongoing, is number what year, well. and rate be. means our compensation at that consistent more where end year related typically we that compensation – really the are because with of flowed year did We expense out. have kind results that’s clarity the a would expense. And include probably the will lot incentive business tail same that’s going full forward that’s that we expense related guidance that accrue time do of that, on hope two not not pieces we one-time G&A laid will our in stock-based I that we comp the impact doing when until that’s guidance. think I

Okay, thank you.

question Cheng come will Our from next Scotiabank. with Paul

Hey guys, good morning.

Good morning, Paul.

saw has looking our I and when been fix has quarter. and capital be think Matt this Chalmette, and inconsistent done at been and in we get it we’re much to non-op in – challenging can including better? Tom, with order What

in. start and can then I’ll Matt weigh

First Chalmette much I move agree have Land of up worked pretty the all, Promised very gotten that rates. the on We on make running a budget with Coker you. Frankly, time, we to yet. at on were positive hard did haven’t came with we – but the is much that’s

The clean fourth the increase project turnaround we and though, yield. But We – the our we and now run margin will and had catalyst down impact fourth in in in did fuel didn’t oil. and that out its it fourth Chalmette ability Cat improve Chalmette actually a Feed quarter quarter. the pretty a to any that minor Hydrotreater in for effectively quarter, also product shut significant fuel run change was do to oil

running are in oil today. We Chalmette fuel

big and is which now the is, refinery. which heavy every harsher to have we the more which the gives capability and heavier, everything talked of the just help in we widening if is we of hydrotreater and like Feed us light – work get will that the investment Chalmette get the our Hydrotreater But material out this dips Chalmette that run do, made fuel investments fine. the to I lot but we’ve be combination a oil to about thing restarting will some system, and on IMO else a Coker Chalmette and that yet reform Cat So of

Okay.

the in that much that in the the run think and fuel I between oil the fourth is or expect you much first quarter? quarter, higher given system? spread how how current different to sulfur And your XX,XXX how high economy

across where won’t expect a the day. necessarily mainly going the was our comment every XX,XXX going run fourth have in What don’t I react on simply market and we go ran we markets the about because single the to what system. I first to we’re to quarter clue to quarter

As to and over into what I said, quarter react do the we market. a it, demonstrate but quarter, we’ll able the first to have we’re position ourselves and in been able we’ve to we’re to fourth the – to do

Delaware Matt everything oil? the run the in in sulfur fourth are City high that’s And quarter fuel

was Delaware Not no. some as able in run XXX% We that City, in were to well. run Paulsboro

brents? you it in when the looking when percentage also. and top sulfur as high at heavy other crude and And show Paulsboro mean Oh, the just part you it the if fuel run you I together simplistically, that part this the your or oil feedstock run together a as of of

areas. other or is to makes there’s another that be the The be a know, we’ve – run feedstocks, the refineries And it going to as a two total piece we it’s shown – that feedstock actually the those is in That is in with of what here. show different at we total what but crude. going run obviously, we is sense different, you in some cases

– refinery one in So

can’t on one be have So high to you that fuel able what decreased sulfur in the report whether here tell or base just you oil. we on increased

rely us No, you’ll that. have to on telling

I see, okay. We Thank do. you.

our And J.P. come Phil Gresh next Morgan. with from will question

CapEx system specific guidance But side, year, good rate could we cost wait across should morning. your you’re know about a how Hi, run perhaps us but they’re Martinez capital and normalized spending not us on to I on as remind Yes. specifically the XXXX. this now think give going Erik, out? you to looking

year about, what terms the moderate Erik $XX has said out of range of talked give it’s we said couple XXXX of years only – and fair of go But in think it the you. $XX over but June, I it’s million couple to million. what inconsistent done I we work weeks. million a I’d don’t Just for And to a we a weeks. $XX slightly, been in that I we’ve let of particular, I in amount well last can for think this probably

is new get return they And strategic work ways to our is then Feed reactors look because year, billing. able with are project a Cat those maybe in a there Shell, in and going actually actually with to delivering to which they we’re we’re a many Hydrotreater, it for project where this otherwise, quicker come than reactors

So our converging will across increase yields units. further

some another forecasting, will million anything’s but of don’t our to come probably spend know, In I that think incremental that’s overturn. with, changed. year, long-term regard So this of $XX you benefits

in consistent out we that’s Not laid the last month. guidance with what

I question. understand final oil one I don’t that. to totally sulfur just fuel then And Okay. mean plant; high the belabor

going if pretty stronger. You that would dynamic of have know, been obviously that’s virus would is prices be there’s generally demand I a effects. with but that prices on mean guess weaker, But I lot thought have would weaker, the demand

strength potentially of So, that sulfur is crude know, to driver just you Thanks. back evolved the would out? that refineries rotation you back it main that dynamic the the of has how to Is this that been going I up. and now same playing the a chase we’re to fuel soften feedstock the high kind guess here oil see see and that heavy that opportunity

were high which on confuse have has is produced, that an to that. less. But being fuel certainly a impact and less Not refineries sulfur other oil and is that is lot because not you impacts, also entirely running

very, So, market a supply of but say, cuts. declining run it result a certainly number you you as sort effects when to going fuel becomes on, oil of have every we by high the sort of you difficult tortured sulfur know, know, of very you know, is

had running But oil, you folks now. right mentioned excess to so fuel you are creating Okay. cleared, high demand and there, you know, still that cheating out don’t sulfur it’s be Tom, think

for this. I made this that’s the a comments addition would lot immune of going is wouldn’t on. industry demand, say to not the Yeah, believe reason that and in Matt to I shipping what’s is

So come there’s less high which heights glorious a that or started oil very sulfur probably fuel fuel now low is off of had. the they sulfur from consumption oil to

clock who we’re talked has as fourth a there movement about we our cleaned, not – part that’s conversion some destruction is there refiners their the quarter, then of And the comments, term. capability. been In technical in meeting on do have resid getting certainly prepared

what prices could And try if production. so the the see remain, fuel I to other back was you’re amount they think will. what extent don’t the even would do them they going to but had of that suspect maybe to go up lighten the that decreases they oil I to which started to way, they –

think I it’ll widen back out.

a moving lot of yeah, Okay, Thanks, pieces. Tom.

Please next ahead. Our Mizuho. come Paul with go question Sankey from will

remind wondering question versus The given a us Japanese very right. hi, wanted I doing you you be the I would and shifting if us Actually here. and quite that you pronunciation, good pronunciation, you Thank shift – would everybody. way to markets contango you. whether curve was the a think are which extent makes you I be to about was hedge why just difference the continue much how could backwardation and into reminding one? would and Thanks. in you would if the Tom

the our crack Just are we number investors to portfolio, across, deliver and hedge investing how policy, we’re in you to fairly trying simple in which of spread. regions. that pads a And regards a our know, have is, we

anything vice versa, don’t have or in if hedge material down game we What from we contango obviously that not we’ll the way. us want is, on baseline nature. do Tom, we’ll actively bring a build cracks comment degree, we’re of to and hedging play don’t that, cracks or backwardation. So of take hedging positions of the a or inventory know but I to we you

get we’d might watch the attention, is is to use change really the hedging pay I You the stuff go part now it, on we but absolutely on equation, right. of look don’t that speculative we’ll business and Paul. crack, And play floating back metric water don’t to business. now go a data we the model, games know, as Matt our We our industry obviously and because we shifting the incentive just where would investors. an of back despite the as on

to on people They’re buy well investing make some haul We long as you – we we crack. hedge haul do in they or PBF even basis. effectively manage that short What know, stock the crudes buy, the we buy a crack.

for area time in we’ve lock That’s when number main price that lands, and we buy the hedge. got. it we by we that’s crudes when the get, that get it the So we we the so when the

$X.X saw related And, derivative quarter, about Paul I in we the million fourth think of worth gain.

you the So there vice the versa. typically see a and on would was the side is, would if offset what gain, market physical see of you

and Yeah, your totally worth, strategy we for I rationale mean, for support it. what it’s agree with your

and On about of but – rest sort the it the three any the seems here, squirrel overall will year any given Thank you. this foot three bit just on situation if we of QX for industry QX, that the you talk the see? light throughputs my already, you referenced that follow-up the is can views on

Year, and on or managed, that I about think New out I’ll that talk of actually will to we’re there. going we VGO – I conference attempted pass. kind managed at this lower have obviously here your being throughputs I ultimately during a is the to that earlier be think in but put conference crisis

think to be start and back if the IMO it pressure, and of the bit this. on oil, XX that’s know, see crudes, But a clean it’s heavy at you dirty spreads comes I start quite to fuel come last heavy XX there’s than spread, you extent, going large higher especially light still out we to was as you but And up year. a dirty clean was spread now, see to

these widens the sour are running But the out, oil. if or some pressure it inefficient and on medium to refineries fuel there’s be making of crudes that going refineries

throughout year that surprised so maybe even and consolidation. And be run this wouldn’t you continuing have I some cuts

the the So worldwide we’ve past, change the see okay, until that I know that we’re to refineries then do in this seen paradigm. come will on, utilization same as the I that new – don’t going

in forward Thanks. you, Thank Look seeing guys. late to March. you

And your Cowen. Jason go Gabelman comes with ahead. question Please final from

good margin I spreads quality both duration delayed be a bit? light thought of guys and impact bit. and crude on on on appreciate quality there have a are be heavy I the to that lot morning. year, upside. benefits medium hey end that the Yeah, sour your understand thoughts fact been I’m guess crude And using But the refining this Thanks. and what I online ask crudes wondering of IMO a the the that spreads capacity that this these and the going benefits could towards sour the heavy the of coming product is with potentially

But pieces crudes sanctions conscious Yeah, would say have – light of a et I impact heavy by deliberate of there’s virus, by is, And the heavy now, expect Iran are already been but it’s imposed two that. affect there’s spreads. couple cetera. still that IMO of Venezuela, we the we if and certainly it underway to exacerbated have constraint that that and an the would through right get that and and and being case obviously medium and the will

interesting and it’s knobs a where demand, product situation current haven’t so many on marketplace. we’ve the to I referenced Now seen such it. somebody with turn to and had volatility stay

what to now, have peers some we actually So economic is refinery referenced had a almost had backwards. our this. of Right have incentives run

diesel. take going and a cracker, cat that gasoline produce was VGO into You which would

running VGO oil into it, doing cat as low that and have well. they of fuel way announced were gasoline producing into some selling by very that actually – sulfur it and as – that cracker of competitors keeping VGO selling high oil distil we’re and it it fuel instead pool. the And our running And sulfur then a not

it, floor that And gasoline bad. did just the the And and rebalance. to be again what I markets if will say? think So going under fine. production will I on a put Well, cracks now, distil are you’re probably

as a that it’s right, I oil analyst, know to understand just a thanks. bit running tough think an that and what And economics the high touched on we’ve All sulfur follow-up, fuel I are. of

to high sense today’s where sulfur prices guess simply, in fuel environment, I very So are, oil. run doesn’t make

is the – answer answer short question The no. to

right, All great.

go-forward – are we pretty change environment. basis, you’re is I in on a with, running any kit prices volumes again, if respond enough in we’ll – here switch the got stay, can the these that and be any beauty out on to quickly we economic the won’t this So is optionality

very you much. Thank

like for remarks. And Mr. over the to Tom Nimbley closing I turn call would back to

and a the terrible quarter Have much first the and have call to having you Thank people pandemic this a great you. problem. Thank There’s that it’s we for to forward day. us, very call we’ll on joining us in thing. hopefully today put look behind

for does Thank this conclude today’s And your participation. program. you

You may time. at any disconnect