Argus US West Coast Products

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1 Market Summary Market Prices The Los Angeles gasoline market continued to move lower Monday after witnessing steady declines for over a week. California CARB diesel prices tumbled to fresh multi-year lows Monday as refiners continued to offload material at sharp discounts to the Nymex. US west coast ethanol declined Monday in a lackluster day of trade. Prompt Argo in-tank transfers sold off 14 from the previous session, leading the US market lower. Key petroleum prices Price ± Los Angeles Carbob Los Angeles Carb diesel Los Angeles jet fuel ANS delivered USWC $/bl South Korea to USWC freight rate Key renewables prices /RIN Vintage Price ± Los Angeles low CI ethanol Renewable fuel (ethanol) RIN Advanced biofuel RIN Biomass-based diesel RIN RVO Key California carbon prices Contents Gasoline 2 Distillates 2 Renewables 3 California carbon 4 Fuel oil 4 News 4 Vintage Price ± Credits California carbon allowances (CCA) carbon fuel standard (LCFS), 12 Dec Price per gallon CCA price for regular Carbob CCA price for ULSD LCFS price for regular Carbob, 12 Dec LCFS price for ULSD, 12 Dec LA 84 Carbob erential California carbon allowances credits hh Sep Oct Nov Dec Jul Sep 14 4 Nov Dec 14 Copyright 2014 Argus Media Ltd

2 RINs /RIN Renewable fuel (ethanol) Biomass-based diesel Cellulosic biofuel Advanced biofuel Renewable Volume Obligation (RVO) West Gasoline coast The Los Angeles gasoline market continued to move lower Monday after witnessing steady declines for over a week. The market appeared unaffected by news of a unit malfunction earlier today at Chevron's 250,000 b/d refinery in Richmond, California. Activity was slow for December CARBOB in Los Angeles. Deals eventually emerged at January Nymex RBOB -19 and Nymex -18, causing the midpoint to weaken by 0.5 / USG. Trade for January CARBOB remained equally thin. Just one deal was heard at February Nymex RBOB -11, keeping forward prices at significant carry to the prompt month in anticipation of heavy next-month maintenance. San Francisco CARBOB was left stable in the absence of fresh trades, bids, or offers Monday. The only gains were made in Portland Monday. Prompt suboctane conventional erentials gained 0.5 from the previous close after a deal was heard completed at January Nymex RBOB West Distillates coast California CARB diesel prices tumbled to fresh multi-year lows Monday as refiners continued to offload material at sharp discounts to the Nymex. Amid bearish sentiment, participants appeared to shrug off news of a unit upset earlier today at Chevron s 250,000 b/d facility in Richmond, California. Los Angeles gasoline 84 Carbob Dec Jan Carbob Jan Feb Carbob Dec sub-octane Dec Jan Azbob Dec Azbob Dec Ethanol low CI Los Angeles distillate Carb ULSD Dec Jan EPA ULSD Dec Jan Jet fuel Dec Jan San Francisco gasoline 84 Carbob Dec Jan Carbob Dec San Francisco distillate Carb ULSD Dec Jan EPA ULSD Dec Jan Jet fuel Dec Jan Portland gasoline 84 suboctane Dec Jan Portland distillate ULSD Dec Jan LA ethanol hhh 15 Sep Oct Nov Dec 14 Copyright 2014 Argus Media Ltd Page 2 of 6

3 California 3:2:1 crack spread $/bl hh California carbon allowances (CCA) Vintage ivery Bid Ask Price ± 2014 Dec Dec Dec CCA volume-weighted averages Vintage ivery VWA MTD 2014 Dec Vintage ivery Trades MTD Volume MTD Sep Oct Nov Dec 14 Last week crude throughputs at California refineries reached their highest levels of the year. In Los Angeles, December CARB ultra-low sulfur diesel (ULSD) in Los Angeles changed hands at January Nymex ULSD -24, well below Friday s Nymex ULSD traded level. Cash prices were further hit by ongoing losses in Nymex ULSD contract Monday, leaving outrights at their lowest level since EPA diesel remained steeply discounted to Los Angeles CARB barrels at 2.75 under. San Francisco CARB diesel changed hands at January Nymex ULSD -29 as well as flat to Los Angeles on a north/ south. This sent erentials tumbling a steep 10 below Friday s market. Barring fresh discussion, the assessment for December EPA diesel in Portland was kept unchanged. Renewables US west coast ethanol plummeted Monday in a lackluster day of trade. Prompt Argo in-tank transfers sold off 14 from the previous session, leading the US market lower. Paper markets followed as well, with January ethanol futures shedding 5.4 from Friday s close. Trade was light throughout the session, with rail markets seeing little action as buyer and seller positions remained wide in most regions. On the US west coast, Northern California railcars shipping this week transacted at $2.1/USG, putting Los Angeles ethanol valuations 3.5 under the previous sessions assessed level. RIN markets were fairly quiet Monday, with current year RIN values trading at or just above the previous session s levels. Overall volume was limited to just under 7mn credits across all D-codes Dec ,000 2,675,000 CCA price for gasoline, diesel 24 Sep ± Aug index ± California regular Carbob California midgrade Carbob California premium Carbob California distillate ULSD CO2 California carbon offsets, 19 Sep Bid Ask Price ± Seller-guaranteed year invalidation California low-carbon fuel standard (LCFS) credits, 19 Sep Vintage Bid Ask Price ± VWA Trades Volume MTD , Month index, 29 Aug 25 California LCFS cost for gasoline, diesel, 12 Dec Avg Fuel Price ± Carbob 0.34 Ultra low-sulfur diesel 0.34 LCFS premium per carbon intensity point, 12 Dec Ethanol 0.21 Biodiesel 0.33 Price ± The 2014 vintage ethanol RINs transacted between 60.5 / RIN and 62 /RIN, lifting valuations just 0.25 /RIN over Friday s assessed levels. Biodiesel RINs of the same vintage were validated changing hands as low as 60 /RIN, while other traders were heard done at the 62.5 /RIN level, contracting the D4/D6 spread to 1.25 /RIN. Only 2015 vintage ethanol RINs ticked lower on the day, shedding 0.25 /RIN from Friday, trading at 60 /RIN. Copyright 2014 Argus Media Ltd Page 3 of 6

4 Compliance costs as measured by the Argus Renewable Volume Obligation (RVO) rose marginally higher to stand at 5.65 / USG on the day. California carbon California Carbon Allowance (CCA) prices were flat Monday in sparse trading. The benchmark December-delivery contract for vintage 2014 CCAs traded once at $12.40/metric tonne in a deal for 200,000t. Vintage 2014 CCAs for October 2015 delivery traded at $12.77/t in another 200,000t transaction. The December 2014 contract closed unchanged at $12.40/t while the December 2015 contract was flat at $12.81/t. A large volume of California -Carbon Fuel Standard credits traded today at $26/t. Fuel oil Demand was strong in US west coast fuel oil markets on Monday but prices dropped tracing falls in the crude market. In Vancouver one supplier was out of low-sulphur 380cst product and was indicating high-sulphur 380cst at $355/t and MGO at $825/t ex-wharf. There were two high-sulphur 380cst stems reported sold delivered in Tacoma at $355/t 1,200t for 17 December and 1,000t for 20 December. There were also three inquiries heard for Monday night in Tacoma two highsulphur 380cst inquiries for 550t and 700t and one for 2,140t of RMK500. News Chevron Richmond reports unit malfunction A unit compressor trip caused flaring earlier today at Chevron's 250,000 b/d refinery in Richmond, California. The refiner reported flaring beginning at 11:15am ET associated with trouble on equipment associated with a hydrocracker at the refinery, according to a filing to state hazardous materials monitors. Flaring was stopped and the unit stabilized by 12:30pm ET, according to a follow up report. er prices open door to US gas tax hikes Plunging US retail gasoline prices could ease the passage of politically unpopular gasoline tax increases in states like Michigan and New Jersey. State and federal legislators are loath to increase fuel Nymex futures New York Rbob New York heating oil Light sweet crude $/bl Crude Settle ± Crack spread Jan Feb Mar Jan Feb Mar Jan Feb Mar $/bl ANS del USWC Feb Feb San Joaquin light Jan Pstg Line 63 Jan Pstg Midway Sunset Jan Pstg Avg Light postings average Heavy postings average Bunkers 180cst 380cst Los Angeles Portland Seattle Freight rates Origin Destination Rate $mn Singapore US west coast South Korea US west coast Asia-Pacific Chile US west coast Chile ,000t clean tankers, lump sum in $ taxes for fear of reprisals from voters. But growing shortfalls in state transportation funding are creating pressure to increase fuel tax rates. Average US retail gasoline prices have dropped by $1.034/ USG to $2.679/USG since April, which could make state tax hike initiatives more politically palatable. The higher taxes, rising fuel efficiency and changing driver behavior will combine to further soften US gasoline demand. Copyright 2014 Argus Media Ltd Page 4 of 6

5 US west coast clean products deals done Timing Price Volume 000 bl RINs deals done Market Timing Price /RIN Volume 000 RINs LA 84 Carbob Dec Jan LA Jet Dec Jan Dec Jan LA Carb ULSD Dec Jan SF Carb ULSD Dec Jan Dec LA CBOB California carbon deals done Date Type Transaction Vintage Volume t Price $ 15 Dec 14 LCFS Trade , Dec-14 CCA (ICE) Future (Dec 14) , Dec-14 CCA (ICE) Future (Oct 15) , Biodiesel Ethanol "There are a lot of states that have known for a long time that they have some serious repairs to their infrastructure that need to be made," said Carl Davis, senior analyst for the nonpartisan Institute on Taxation and Economic Policy (ITEP). "The hope is that the lower gas price now will finally be enough to put it over the top and they could actually make some improvements that have needed to be made for quite awhile." Taxes vary from state to state. The American Petroleum Institute estimates state gasoline taxes average Legislatures in 23 states have not adjusted rates in at least a decade. The purchasing power of such rates has withered, contributing to shortfalls in state transportation funding. In Michigan, where lawmakers have considered changes to one of the six-highest US rates, the state estimates it needs another $1.2bn over ten years. New Jersey transportation officials warned earlier this year the state would exhaust its five-year capital plan a year early without changes to gasoline taxes. Michigan governor Rick Snyder earlier this month proposed replacing a 19 fixed gasoline tax with a gradually increasing, percentage-based tax. The state last adjusted fuel taxes in New Jersey Assembly transportation chairman John Wisniewski proposed a 25 increase in gasoline taxes in November to address transportation funding. And refiners are watching how carbon fees passed through to California retail customers beginning in January will disrupt improving economic conditions and driver demand in one of the largest US fuel markets. States that adopted variable rates ahead of this year's price plunge discovered that the adjustment cuts both ways. Virginia, Maryland and Kentucky all set minimum prices for their rates but will still see portions of their assessments fall. Kentucky's 9pc tax rate on average wholesale prices will deliver a 4.3 drop and an estimated $129mn loss to the state's road fund next year. Even if lawmakers pass gas tax changes, they may not stick. Massachusetts voters repealed an indexed gasoline tax in November, amid the four-year retail price lows. The tax was just a year old. US lawmakers, facing similar transportation budget pressures, could consider making changes to the federal gasoline tax during debate on highway funding next year. Congress last adjusted the federal fuel excise tax 21 years ago, to An effort earlier this year, amid higher summer prices, failed. The Petroleum Marketers Association of America opposes an increase in federal tax rates "but we understand that there's one coming," said director of congressional relations Rob Underwood. "The best bet is it is going to be 2015, if they want to try and get an increase," Underwood said. "If you don't see something next year, you're not going to see it for another two years, until after the 2016 elections." Copyright 2014 Argus Media Ltd Page 5 of 6

6 announcements Following industry consultation, Argus will cease publication of its 2012 RIN assessments on 31 December Starting 2 January 2015 the Argus Year 1 RIN assessments (PA , PA , PA , PA ) will reflect 2013 RIN assessments. To comment please contact Zander Capozzola at Zander.Capozzola@argusmedia.com or Argus DeWitt Toluene and Xylenes Daily Argus DeWitt is pleased to announce the launch of Argus DeWitt Toluene and Xylenes Daily market report. This new daily service provides key price assessments as well as concise, insightful market commentaries on the toluene, paraxylene and mixed xylenes markets in the Americas, Europe and Asia-Pacific. For more information, please contact petrochemicals@argusmedia.com. Argus direct Web Mobile Alerts Argus Direct provides immediate access to market moving news, intelligent analysis and robust price assessments, wherever. Argus US West Coast Products is published by Argus Media Ltd. Registered office Argus House, 175 St John St, London, EC1V 4LW Tel: Fax: sales@argusmedia.com ISSN: copyright notice Copyright 2014 Argus Media Inc. All rights reserved. All intellectual property rights in this publication and the information published herein are the exclusive property of Argus and/or its licensors and may only be used under licence from Argus. Without limiting the foregoing, by reading this publication you agree that you will not copy or reproduce any part of its contents (including, but not limited to, single prices or any other individual items of data) in any form or for any purpose whatsoever without the prior written consent of Argus. trademark notice ARGUS, ARGUS MEDIA, the ARGUS logo, ARGUS US WEST COAST, other ARGUS publication titles and ARGUS index names are trademarks of Argus Media Ltd. Visit for more information. Disclaimer The data and other information published herein (the Data ) are provided on an as is. Argus makes no warranties, express or implied, as to the accuracy, adequacy, timeliness, or completeness of the Data or fitness for any particular purpose. Argus shall not be liable for any loss or damage arising from any party s reliance on the Data and disclaims any and all liability related to or arising out of use of the Data to the full extent permissible by law. Publisher Adrian Binks Chief operating officer Neil Bradford ceo americas Euan Craik Global compliance officer Jeffrey Amos commercial manager Karen Johnson editor in chief Ian Bourne Managing editor, Global Cindy Galvin Managing editor, americasl Jim Kennett editor David Ruisard Tel: uswestcoastproducts@argusmedia.com customer support and sales Technical queries technicalsupport@argusmedia.com All other queries support@argusmedia.com Houston, us Tel: New york. us Tel: Washington Dc, us Tel: London, uk Tel: astana, kazakhstan Tel: Beijing Tel: Dubai Tel: Moscow, russia Tel: rio de Janeiro, Brazil Tel: Singapore Tel: tokyo, Japan Tel: Petroleum illuminating the markets