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Vol. 29, No. 2 www.energyintel.com January 14, 2019 Delta Shores Up Supply Security With Monroe Energy Subsidiary Contents Opec Cuts Start to Bite 2 Six years after Delta Air Lines purchased the mothballed Managing Price Risk 4 Trainer refinery in Pennsylvania, the benefits of vertical Japanese Buy SAF at SFO 4 integration from the refinery to the wingtip are paying dividends — both strategic and financial. Delta’s wholly Pacific Snapshot 5 owned subsidiary Monroe Energy acts as “a strongly correlated hedge on middle distillate production” for the cant loss like most East Coast refineries. As a wholly owned airline, according to its Chief Financial Officer Patrick subsidiary, Monroe Energy has its own board of directors Callan, who took over that role early last year after man- that oversees the refinery’s operations and finances and aging Delta’s fuel purchasing in Atlanta for five years. reports to Delta Air Lines. All of Monroe’s jet fuel output is Delta bought the defunct Trainer plant from ConocoPhillips sold to Delta on an arm’s-length basis linked to New York in mid-2012 and transformed the second-oldest still-opera- Harbor spot markets. The airline sells excess volume tional refinery in the country into a jet fuel machine, with a onward at New York area airports including JFK and 20% jet fuel yield that is double the typical 10% rate across Newark to Delta’s joint-venture partners such as Air France- the US downstream sector. The plant has a nameplate capac- KLM, Aeromexico and others. JFK and LaGuardia are Delta ity of 185,000 barrels per day but is operating at 200,000 b/d hubs. Along with Newark, the three airports serving New and produces around 40,000 b/d of jet fuel — up to 40% of York City account for nearly 10% of total US jet fuel East Coast production. Supply security was a prime strategic demand of about 1.7 million b/d and are growing by at least motive for the purchase, since Delta’s vast operations at air- 2.4% each year: JFK is the largest with 85,000 b/d, followed ports along the East Coast would have been compromised by Newark at 60,000 b/d and LaGuardia with 24,000 b/d by yet another refinery closure following widespread down- that is set to climb sharply once a long-standing rule that stream shutdowns in that region over the last dozen years. restricts flight distances is lifted. The airline currently needs 260,000 b/d of jet fuel to supply The ability to self-supply provided another key moti- its global operations. Callan tells Energy Intelligence that vation for the refinery purchase. Aside from JFK, volumes from Monroe effectively provide a hedge for 30% LaGuardia and Newark airports in the Northeast of its exposure to fuel price risk. Over the last five years, region, Delta supplies its own jet fuel at Boston’s Logan Delta has shaved an average of $200 million from its fuel Airport from the Monroe plant, shipped via barge expenses or some 5¢ per gallon due to direct supplies and down the Delaware River from Marcus Hook, exchanges from Monroe. Pennsylvania then along the East Coast into Boston Harbor. Callan says that supply chain represents signifi- Supplying New York Airports cant cost savings in the relatively high-priced Boston mar- Delta paid $180 million for the plant, including $30 ket, which is also supplied from Canada by Irving Oil from million provided by the state of Pennsylvania under an its Newfoundland refinery due to Canada’s exemption employment initiative — an obligation that has now been from the Jones Act. BP, Royal Dutch Shell and Valero also paid off. The airline has made capital outlays of some market jet fuel at Logan. Shipping restrictions under the $80 million-$100 million a year to operate and upgrade Jones Act that require US-flagged vessels for intercoastal the refinery. The plant was shut down for a comprehen- shipments prompted Monroe to take delivery of a mid- sive maintenance overhaul in the fourth quarter of 2018, range tanker with a 310,000 barrel capacity. The US in what now looks like fortuitous timing but was planned Constitution was built at the General Dynamics shipyard for that seasonally weak period for refining margins. in San Diego — one of only two facilities left in the coun- With gasoline trading at a discount to Brent crude for much try building large Jones Act ships, along with Southwark of the last quarter, the plant would have incurred a signifi- in the Philadelphia Naval Yard.

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Sourcing Crude Feedstock an assortment of oil firms, pipeline companies and think Oil market dynamics at any given time determine how tanks, the NPC committee is charged with determining how Monroe Energy sources crude oil for the refinery. At the federal infrastructure dollars should be spent to buttress US moment, feedstock is split 50-50 between domestic and for- supply security. Callan says his participation on the Supply- eign supplies of light, sweet crude coming mainly from Demand Resiliency team is “a great opportunity to highlight Nigeria and other countries in West Africa. The the pinch-points all along the jet fuel supply chain that threat- Constitution brings in domestic supplies from the Gulf en to shut down airports on a daily basis.”  Coast, while Monroe also delivers shale oil from the Permian Basin in West Texas by railcar into a depot near the refinery in Marcus Hook. At the time of the refinery pur- Spot Cargo Markets — chase, the wide gap between West Texas Intermediate (WTI) Opec Cuts Start to Bite and Brent made the economics of railcar delivery viable. But those shipments dried up in 2014 when the differential nar- Oil prices are up by more than a fifth since late December rowed significantly. Callan says that railcar deliveries are fea- as Opec production cuts begin to bite. Key Saudi Arabian sible at a spread of around $8 per barrel, which is now the case oil exports are expected to drop to 7.2 million barrels per and is likely to continue through 2019 given current oil market day in January and to 7.1 million b/d in February after hit- dynamics. Monroe is well-placed to benefit from the expected ting a record 8 million b/d in November, Saudi Energy spike in the middle distillate complex from the impending Minister Khalid al-Falih said at a press conference in Riyadh switch in the global shipping industry from high-sulfur fuel oil on Wednesday. “We are serious about restoring balance to the to low-sulfur marine diesel that takes effect from Jan. 1, 2020 market,” al-Falih said. “We are concerned about volatility in (JFI Oct.29’18). Depending on how the situation plays out, the oil market ... We have seen peaks and drops in prices [that Callan says he would not rule out maximizing diesel output are] completely unjustified by the fundamentals,” he added. and buying jet fuel in the open market to benefit from any International Benchmark Brent closed at $61.68 per barrel spike in diesel differentials in the run-up to the spec change. Thursday, up $5.73/bbl on the week and after dropping below But he emphasizes that any benefit to the refinery would help $50/bbl in late December. US price-pin West Texas offset higher fuel bills paid by Delta, as jet fuel prices rise in Intermediate saw gains of $5.50/bbl last week to finish at tandem with any diesel spike (JFI Oct.8’18). $52.59/bbl Thursday. Opec and its non-Opec partners, led by Even though the refinery was configured to mainly pro- Russia, on Dec. 7 agreed to cut production by 1.2 million b/d duce gasoline and diesel for most of its 95-year existence, during the first half 2019, but some traders feared the cuts did those products are superfluous to the plant’s prime objec- not far enough and oil prices languished last month. Al-Falih tive of producing jet fuel under Delta’s ownership. has not ruled out the possibility of extending the deal beyond Monroe trades the refined product output other than jet its midyear expiry but said any action to restore market stability fuel with other firms in exchange for more jet fuel under a could swing either way. United Arab Emirates Energy Minister complex web of exchange deals that can involve, for Suhail al-Mazrouei earlier said the Opec-led deal would be suf- instance, trading gasoline in New York Harbor for jet fuel in ficient to balance oversupplied global oil markets, but warned Los Angeles. For several years, Monroe had a deal with that the US-China trade war and rapidly growing US shale oil Phillips66 and BP whereby those firms took all products production remained potential threats to prices this year. besides jet fuel for their own systems or trading on spot mar- London-based traders tell Energy Intelligence that oil kets. That arrangement ended in 2016, and Monroe has prices could easily go above $100 per barrel by the end of reportedly hired investment firms to provide advice on poten- the year when the market starts gearing up for tough new tially lining up other joint-venture partners. global limits on sulfur in bunker fuels from Jan. 1, 2020. Diesel and jet prices are expected to rally dramatically Investing in Supply Security from September as shippers prepare to switch up to 3.7 Callan’s unique vantage point over the aviation sector million barrels per day of high-sulfur fuel oil demand over from both refining and airline perspectives is put to good to low-sulfur gasoil (p4). Jet fuel premiums held firm in use on a National Petroleum Council (NPC) committee Europe last week against sharp gains in underlying ICE gasoil that is drafting a document for the Department of Energy, futures amid unusually brisk trade for the time of year. January which will include specific measures on how to shore up arrivals are currently pegged at a healthy 1.5 million metric the strained infrastructure in the US for delivering jet fuel tons. European major Royal Dutch Shell sold two cargo lots in from the country’s refineries and foreign sources to air- Monday’s window: 27,000 tons to Swiss trader Vitol due into ports in the far-flung country (JFI Aug.13’18). “It’s all Le Havre Jan. 26-30 at a $1.50 per ton premium to the bench- about logistics,” Callan tells Energy Intelligence, and the sys- mark Platts’ c.i.f. cargo mean (CCM) plus the 0-6,000 tons tem is already so stretched to the limits that airports across the balance at a $43/ton premium to January ICE gasoil futures country are operating hand-to-mouth during peak demand and the same volume to French oil company Total into periods in the summer months (JFI Sep.25’17). Working with Rotterdam Jan. 17-21 at CCM plus $3/ton. Chinese refiner Page 3 www.energyintel.com January 14, 2019

Unipec went on to sell 30,000 tons to Vitol into Rotterdam Spot Jet Fuel Prices Jan. 29-Feb. 2 at February plus $48/ton in Tuesday’s window. $100 Jet tanks in Amsterdam-Rotterdam-Antwerp fell to a 17-month ($/bbl) low of just 556,000 tons on Jan. 10. No import tankers arrived $93 during the preceding week when a ship left for the heavily $86 import-dependent UK. Europe’s busiest Heathrow airport, $79 which already accounts for some 80% of leading UK jet fuel Singapore demand, has opened an eight-week public consultation on its $72 Rotterdam US Gulf Coast expansion plans including night flights and flight path chang- $65 es, which could see 5% or 25,000 extra flights per year added Oct 19 Nov 2 Nov 16 Nov 30 Dec 14 Dec 28 Jan 11 even before a third runway is built. Heathrow passenger traffic grew 2.7% last year to a record 80 million passengers, the air- port announced Jan. 11. A drone briefly disrupted flights at slightly more than diesel’s growth rate of 1% but double the Heathrow last Tuesday as it emerged the airport is paying £10 0.5% gain recorded for gasoline last year. A fire at million ($12.8 million) for a new drone detection system. HollyFrontier’s 41,400 b/d refinery near Salt Lake City in Parliament is meanwhile set to reject Prime Minister Theresa Utah did not appear to disrupt operations at the plant. Airlines May’s EU withdrawal agreement next week, but new legisla- have gotten accustomed to trucking fuel into that airport due to tion has now been passed to accelerate alternatives and help limited supply alternatives in that area. avoid a damaging no-deal Brexit on Mar. 29. Measures are in Asian jet markets held relatively stable following their place to keep aircraft flying in the event of a no deal outcome recent swoon but remain at weak levels even as the but the inevitable shock to the UK economy would severely February-loading spot market started to stir. The bench- curtail demand for air travel. mark Singapore spot price differential inched up by a neg- The new year injected renewed verve into the US middle ligible 2¢/bbl from the previous week to a discount of distillate complex. February ultra-low-sulfur diesel futures $1.30/bbl to Singapore quotas on Jan. 10. Along the way, it jumped 13¢ per gallon on the week, pushing outright jet touched a low of minus $1.35/bbl on Jan. 4, its weakest fuel quotes into the $1.85-$1.92/gallon level. Chicago was level in more than three years. The last low had been a dis- the outlier to that range as heavy selling by local refineries count of $1.40/bbl on Aug. 12 in 2015. In the key Northeast pushed jet spreads down to 23¢/gallon below February die- Asian market, Taiwan’s Formosa reportedly sold Feb. 1-5 sel futures. The jet fuel market started the year with a relative- loading jet through tender to Shell and Unipec at a discount of ly lean inventory cushion, even though domestic production is around 90¢/bbl to Singapore quotes on a Taiwan f.o.b. basis. still booming at 1.85 million b/d. Stocks totaled 40.5 million The refiner had originally offered two 300,000 bbl cargoes — bbl in the week ended Jan. 4, according to Energy Information one loading Feb. 1-5 and the other loading Feb. 11-15. South Administration data. East Coast stocks plunged by 700,000 bbl Korean refiners could be looking to offer February loading to 8.4 million bbl amid a dearth of imports and were 20% spot jet at discounts of around 50¢/bbl to Singapore quotes on below the year-earlier mark. Deliveries soared to more than a Korea f.o.b. basis. Asian demand remains soft due to a rela- 1.8 million bbl as airlines and suppliers replenished tank levels tively mild winter so far in large swaths of Northeast Asia. following the busy yearend holiday period. Imports also Temperatures in much of Japan are likely to remain warmer surged to 223,000 b/d but mainly landed at West Coast ports. than usual from now through Feb. 11, according to the Japan Strong export flows out of the Gulf Coast to Latin America Meteorological Agency. Jet kerosene demand is much softer and the Caribbean are keeping trade flows balanced. The slow than last year, which experienced an unusually cold winter. pace of deliveries in the last weeks of 2018 have clipped the On the supply side this year, jet inventories remain ample wings of US demand growth to just 1.1% for the calendar while China’s exports are more than sufficient as the govern- year, down from around 3% in the first three quarters. That’s ment allocates generous export quotas for refiners to alleviate

Jet-Gasoil Spreads European Quarterly Jet Fuel Swaps Quotes +$6 ($/bbl) Rotterdam Spot vs. ICE (Bid/Offer Range in $/ton, c.i.f. NWE) +$4 New York Spot vs. Nymex Q Chg. Jan 11 Jan 4 Q1’19 41.50 621.00-622.00 579.50-580.50 +$2 Q2’19 40.25 621.75-622.75 581.50-582.50 $0 Q3’19 37.75 627.25-628.25 589.00-591.00 - $2 Q4’19 36.50 634.00-635.00 596.75-599.25 - $4 Oct 19 Nov 2 Nov 16 Nov 30 Dec 14 Dec 28 Jan 11 Prices are live for midday. Source: FCStone January 14, 2019 www.energyintel.com Page 4 a domestic surplus. Asian refiners are benefiting from low jet SAS and Finnair becoming their first airline customers (JFI fuel prices, which help induce cargo flows out of the region to Dec.10’18). The fuel is produced by World Energy, which higher-priced markets in the US and Europe. But at the remains the world’s only continuous SAF producer at its AltAir moment, the arbitrage windows to Europe and the US appear Fuels plant in Los Angeles. ANA said the use of blended SAF break-even for most market players. Looking ahead, jet kero- would save roughly 150 metric tons of carbon dioxide. “By sene demand should pick up due to increased air travel around working with Shell to use SAF, ANA hopes to enhance the qual- the Lunar New Year festival celebrated in early February in ity of fuel used in its aircraft while also becoming the leading China, Taiwan, South Korea, Vietnam and Singapore.  ecofriendly airline group,” the company added. “At ANA, we believe that the UN’s Sustainable Development Goals represent a blueprint to a more prosperous and more environmentally Briefs responsible future, and we are inspired by the SDG commitment AIR TRAFFIC — Latest data reflect a slowdown in eco- to ‘build a better world for people and our planet,’” said ANA nomic growth, with global passenger traffic gains moder- Executive Vice President Naoto Takada. “Adopting sustainable ating to 6.2% and freight volumes unchanged in aviation fuel is just one step in the fight against climate change, November versus year-earlier rates, according to the and ANA will continue looking for ways to give back to the International Air Transport Association (IATA) (JFI planet that we all depend on,” he added. Oct.22’18). Passenger throughput in November was slightly ahead of the 6% growth rate seen over the last decade but HEDGING — London-based Enerjen Capital is preparing below the five-year average of 7.1% and lower than the 6.6% to launch a bespoke solution for airlines to hedge against growth in the first 11 months. That moderation is consistent the expected spike in fuel bills when new International Civil with signs that global economic expansion is slowing, with Aviation Organization’s (ICAO) CORSIA regulations come the composite Purchasing Managers Index (PMI) falling to its into force from 2021. Set up by former Vitol, Bank of lowest level in more than two years. The fillip to demand America and Moller-Maersk executives and advised by vet- from lower air fares has also run its course, IATA pointed out. eran ex-BP oil trader Andy Hall, Enerjen says its mission is International passenger flows climbed by 6.6% in November “to help our clients navigate through the transition to a and reached a nine-month high of 9% in Europe, outpacing clean energy future.” The firm has already launched an the 6% gain seen in Asia-Pacific and North America. Carriers IMO 2020 hedging vehicle to allow shippers to protect based in the Middle East posted the slowest growth rate of themselves against the expected spike in diesel prices when 2.8% in international traffic. In terms of domestic travel new International Maritime Organization (IMO) limits on demand, Russia posted the strongest 13.8% jump, followed sulfur take effect next year (JFI Oct.29’18). That offering is by India at 13.3%. A slowdown in China pushed domestic due to close next month with the funds raised used to buy long- passenger growth rates down to 7.2% from 12.2% in the pre- only hedges through to September 2019, before diesel prices vious month. IATA said slowing demand for freight reflects start to spike (p1). “Within the Note is a curated hedge basket the end to the inventory restocking cycle. Freight demand is that applies our specialty expertise in the crude oil and refined on course to show a gain of less than 4% in 2018, versus the products markets with upside leverage to protect against a more 10% jump recorded in 2017. general ‘oil spike’ risk to create an optimal hedging strategy for consumers,” says Enerjen. The company says its IMO 2020 ALTERNATIVE FUELS — Japan’s All Nippon Airways vehicle will be cashed out and profits distributed to clients in (ANA) and Japan Airlines (JAL) are the latest to sign up for early 2021. Crucially for often cash-strapped shippers and air- sustainable aviation fuel (SAF) at San Francisco airport. lines, such Notes are classed as securities rather than deriva- ANA revealed Jan. 7 that it has agreed to buy 70,000 gallons tives on balance sheets and can be easier to finance. Only 4% (265,000 liters) of SAF from World Energy via a partnership of shippers are thought to have fuel hedging programs. For air- with leading into-wing supplier Royal Dutch Shell. JAL lines the figure is higher but still relatively low. The majority of revealed the same day that its supply deal, also with Shell, airlines will start participating in ICAO’s Carbon Offsetting and would start this month for flights from San Francisco to Reduction Scheme for International Aviation on a voluntary Tokyo. Shell began supplying SAF at San Francisco last month basis from the start of 2021, before the scheme becomes man- alongside Dutch firm SkyNRG with European carriers KLM, datory for all carriers in 2027 (JFI Nov.12’18). 

Chairman: Raja W. Sidawi. Vice Chairman: Marcel van Poecke. Chief Strategy Officer & Chairman Executive Committee: Lara Sidawi Moore. President: Thomas Marchetti. Executive Editors: Alex Schindelar, Jim Washer. Editorial Director: David Pike. JFI Editor: Cristina Haus ([email protected]). Editorial: London: Kerry Preston, Ronan Kavanagh. Singapore: Freddie Yap. US: Frans Koster. Head Office: 270 Madison Avenue, Suite 302, NY, NY 10016. Tel: +1 212 532 1112. Fax: +1 212 532 4479. Production: Terry King. Sales: [email protected]. Customer Service: [email protected]. Bureaus: Houston: Tel.: +1 713 222 9700. Fax: +1 713 222 2948. London: Tel.: +44 (0)20 7518 2200. Fax: +44 (0)20 7518 2201. Moscow: Tel.: +7 495 244 3572. Fax: +7 495 956 2471. Singapore: Tel: +65 6538 0363. Fax: +65 6538 0368. Washington, DC: Tel.: +1 202 662 0700. Fax: +1 202 662 0751. Other Publications: Petroleum Intelligence Weekly, EI New Energy, Energy Compass, Energy Intelligence Briefing, Energy Intel- ligence Finance, International Oil Daily, Jet Fuel Intelligence, Natural Gas Week, Nefte Compass, NGW’s Gas Market Reconaissance, Nuclear Intelligence Weekly, Oil Daily, Oil Market Intelligence. Copyright © 2019 by Energy Intelligence Group, Inc. ISSN 1528-1183. Jet Fuel Intelligence ® is a registered trademark of Energy Intelligence. All rights reserved. Access, distribution and reproduction are subject to the terms and conditions of the subscription agreement and/or license with Energy Intelligence. Access, distribution, reproduction or electronic forwarding not specifically defined and authorized in a valid subscription agreement or license with Energy Intelligence is willful copyright infringement. Additional copies of individual articles may be obtained using the pay-per-article feature offered at www.energyintel.com. Page 5 www.energyintel.com January 14, 2019

Pacific Snapshot: Plentiful Supply Provides Stock Cushion

Jet fuel stocks across the Pacific Pacific Region Jet Fuel Stocks (‘000 bbl) Sep ’18 vs. Basin reached 27.5 million bbl at end- Region Sepp Augr Julr Junr Mayr Aprr Sep ‘17 Aug ‘18 September as high production in Japan 5,583 6,059 5,472 5,313 5,448 6,891 -13.4% -7.9% South Korea and sufficient imports S. Korea 7,716 7,280 10,357 7,232 6,352 6,566 +59.0 +6.0 into Australia kept those countries Australia 3,798 4,100 3,806 3,481 3,624 3,902 +29.5 -7.4 well-supplied. That pushed regional US W. Coast 10,420 9,092 9,007 8,975 8,555 9,669 +0.6 +14.6 tank levels nearly 12% above the year- Total 27,517 26,530 28,642 25,002 23,979 27,028 +11.9% +3.7% earlier mark and set the stage for price Stocks of Burning Kerosene (‘000 bbl) weakness in the fourth quarter. Japan Japan 17,709 15,085 12,485 11,548 11,765 10,836 -3.6% +17.4% was the only country to show a year-on- S. Korea 4,427 4,512 4,505 4,288 4,559 4,443 -1.0 -1.9 year deficit as refiners ratcheted output Total 22,136 19,598 16,989 15,836 16,324 15,279 -3.1% +13.0% lower in line with lackluster demand.

Maintenance turnarounds in Japan’s Japanese Jet Fuel Market (‘000 bbl) downstream sector trimmed refinery Refinery Utilization 91.3% 94.7% 93.3% 95.1% 91.5% 90.3% 9.7% -3.6% utilization rates to 91.3% of capacity Jet Fuel Production 284 320 307 284 281 284 -6.9 -11.4 and cut jet output to 282,000 b/d. Jet Fuel Yield 8.8% 9.6% 10.0% 10.5% 9.6% 8.8% -1.6% -8.6% Exports nevertheless rose to 84,000 b/d Trade as traders sought out higher-priced for- Exports 84 68 78 62 62 48 +24.6% +23.9% Imports (Bonded) 19 1 2 6 10 10 +238.1 +1367.3 eign markets. Japanese jet usage fell Demand slightly to 232,000 b/d, with weak Bonded 146 131 135 146 150 145 +9.5% +11.8% demand for domestic supplies offsetting Non-Bonded 85 106 97 90 128 70 -14.1 -19.3 the 9.5% spike in liftings of bonded Total 232 237 231 236 278 215 -0.6% -2.1% fuel used on international flights.  p=Preliminary. r=Revised. Sources: IEA, EIA, PAJ, METI, KNOC, EIG Estimates

US Supply, Demand and Stock Trends at a Glance

US Jet Kerosene Stocks Regional Stock Levels, Jan 4 4848 20 (million bbl) 2018 2019 4646 2016 2018 44 2012 15 44 42 4240 2013 10 38 2019 40 2017 2014 36 5 3834 3632 0 DecDec Jan Feb Mar Apr May JunJ un Jul Aug Sep OctOct Nov DecDec Padd 1 Padd 3 Padd 5

Jet Kerosene Stocks 2019 2018 2017 Latest Levels vs. (million bbl) Jan 4 Dec 28 Dec 21 Decp Novp Jan 5 Dec Dec 28 ‘18 Jan 5 ‘18 East Coast (Padd 1) 8.4 9.1 8.3 8.8 8.3 10.5 9.6 -7.3% -20.1% West Coast (Padd 5) 10.1 9.5 9.4 9.8 8.5 10.2 10.2 +5.6 -1.2 Central (Padd 2-4) 22.0 22.1 22.7 22.1 21.4 20.6 21.5 -0.3 +6.8 Total Stocks 40.5 40.7 40.5 40.6 38.1 41.4 41.3 -0.5% -2.0% 2019 2018 2017 Latest Wkly. Dec ‘18 Nov ‘18 (’000 b/d) Jan 4 4 Wk. Avg. Decp Novp Dec Nov Change Dec ‘17 Nov ‘17 Jet Refinery Output 1,850 1,864 1,861 1,726 1,784 1,671 -2.5% +4.3% +3.3% % Jet Yield 10.3 10.4 10.4 9.9 9.2 8.6 -1.4 +14.0 +15.6 % Utilization 96.1 96.0 95.7 93.2 94.7 92.6 -1.1 +1.1 +0.7 Imports 223 95 90 107 151 194 +757.7 -40.5 -44.7 Sales 1,808 1,661 1,639 1,783 1,756 1,685 +10.9% -6.6% +5.8% p=Preliminary. Source: US Department of Energy. Latest available data, including historical revisions. January 14, 2019 www.energyintel.com Page 6

JET FUEL INTELLIGENCE DATA

PRICES IN SPOT CARGO AND FUTURES MARKETS

ICE Prompt Futures ($/ton) European Spot Jet Fuel ($/ton)* Asian Spot Jet Fuel Markets ($/bbl)† Gasoil 0.1% Sulfur NW Europe Mediterranean Mideast Singapore Japan c.i.f. Weekly Trend +35.81 +41.81 +44.51 +8.38 +4.98 NA Last Week 552.94 595.06 586.69 69.93 71.41 73.33 Previous Weekr 517.13 553.25 542.17 61.55 66.43 NA Dec 24-Dec 28 504.00 543.42 531.84 62.41 65.73 66.99 Dec 17-Dec 21 531.30 564.75 562.48 67.78 69.82 71.54 Nymex Prompt Futures ($/gal) US Spot Jet Fuel Markets (¢/gal) NY Harbor ULSD New York† Gulf Coast† Chicago* Los Angeles† Weekly Trend +0.12 +19.20 +12.56 +6.74 +11.74 Last Week 1.85 196.41 178.18 161.81 186.28 Previous Week (r) 1.72 177.21 165.63 155.07 174.54 Dec 24-Dec 28 1.68 171.14 159.71 156.58 170.07 Dec 17-Dec 21 1.77 178.07 166.39 163.89 177.12 r=Revised. Source: *OPIS Worldwide Jet Fuel Report, †Thomson Reuters.

DISTILLATE CRACK SPREADS – ICE vs Nymex KEY BIOFUEL PRICES 78 54 (¢/gal) US ($/gallon) Jan 8 Dec 31 Chg. Futures: 68 46 Nymex No. 2 Oil Crack (Ihs) CBOT Ethanol 1.27 1.27 +0.01 RBOB Gasoline 1.36 1.32 +0.04 58 38 Spot market: Ethanol Midcont. 1.23 1.21 +0.02

48 30 Ethanol NY Harbor 1.42 1.38 +0.04 Ethanol US Gulf 1.38 1.37 +0.01 ICE Gasoil Crack (rhs)

38 22 Europe ($/ton) Jan 8 Dec 31 Chg. Jan '1 8 Apr '1 8 Jul '18 Oct '18 Jan '1 9 Futures:

81 52 ICE Gasoil 546.50 504.75 +41.75 (¢/gal) Spot market:

75 46 Gasoline 486.00 473.00 +13.00 ICE Gasoil Crack (rhs) Nymex No. 2 Oil Crack (Ihs) Diesel 549.00 493.50 +55.50 Biodiesel: 69 40 Fame 0 780.00 780.00 0.00 RME 920.00 920.00 0.00 63 34 SME 750.00 745.00 +5.00 PME 705.00 690.00 +15.00 57 28 Nov 2 7 Dec 4 Dec 11 Dec 18 Dec 25 Jan 1 Jan 8 Source: Thomson Reuters, Exchanges

GLOBAL CARBON PRICES EU CARBON FUTURES PRICES EU CARBON FORWARD CURVE (€/ton) (€/ton) (€/ton) Jan 8 Dec 31 Chg. €26 €30 EUA Dec ‘19 22.84 25.01 -2.17 EUA US ($/ton): €22 €25 CCA (Calif.) Dec ‘19 16.36 16.42 -0.06 €18 RGGI (Northeast) Dec ‘19* 5.79 5.79 0.00 €20 New Zealand (NZ$/ton) €14 €15 NZU (spot) 24.90 25.10 -0.20 €10 YearYear Ago Ago MonthMonth Ago Ago Asia ($/ton) Jan 4 Dec 28 Chg. €10 CurrCurrent ent China-Guangdong 2.41 2.48 -0.07 €6

South Korea 21.44 21.19 +0.25 €2 €5 Benchmark months. *Short tons; all others metric Jan '13 Jan '15 Jan '17 Jan '19 2018 2019 2020 2021 2022 2023 2024 2025 tons. Source: ICE, OMF ECX front-month futures. Source: ICE ECX EUA forward curve. Source: ICE

DATA: JFI’s biofuel and carbon data are sourced from EI New Energy, Energy Intelligence’s publication on renewables, carbon and transportation. For more data and information, see www.energyintel.com/newenergy.