Renewable Diesel Margins Firm on Tenuous Diesel Strength
- US renewable diesel (RD) margins rose on tenuous diesel strength alongside mostly stable feedstock pricing. Stronger LCFS credits provided tailwinds to margins during the shortened Thanksgiving week.
- The Bean Oil-Heating Oil (BOHO) reached as wide as $1.14/gallon as gains in the front-month CBOT soybean oil outpace Nymex diesel. The spread ended the week unchanged at $1.13/gallon.
- Used Cooking Oil (UCO) remained the highest returning feedstock at $2.34/gallon on average. UCO imports have tempered US UCO prices despite mounting demand. Tallow margins remained the second-best performing feedstock at $1.66/gallon. Mounting tallow imports have helped preserve US Gulf coast BFT margins.
- RINs were little changed week-over-week as news on Wednesday of the approval of six SREs robbed the market of initial gains. The 2022 vintage market posted tempered gains amid the approaching compliance deadline, with the inter-vintage spread widening to 2-3c.
- California Low Carbon Fuel Standard (LCFS) posted gains to close out a shortened trade week. Prompt credits rose $1/t, or 1.5%, to $68.00/t. Gains along the forward structure were less pronounced. Contango heading into 2024 widened to $0.5/t, and a $1.25/t contango into Q2 2024. LCFS strength had been driven by trader buying and strength in futures markets this summer as the credits become more attractive options ahead of workshops covering CARB’s more stringent scoping plan. Buying quickly turned to selling once the workshops concluded as traders became disillusioned with the timeline for the rulemaking.
- At least four RD bookings have been reported for November delivery totaling 650,000 Bbl. A 181,000 Bbl RD vessel landed in Los Angeles, California on November 13, with an additional vessel carrying 286,000 Bbl arriving in November. Three RD vessels originating from US Gulf coast locations arrived in California this month totaling more than 1,000,000 Bbl.
- A single 244,000 Bbl RD vessel made the voyage from Singapore to California in September, according to Vortexa. At least four RD vessels for August delivery were booked from Singapore to California. August deliveries totaled 844,000 Bbl. Just two vessels totaling 406,000 Bbl were booked during July, as June maintenance at Neste’s Singapore facility curbed output. Only two vessels totaling 498,000 Bbl were booked for the month of June. At least six RD vessels were booked for California destinations over the course of May, totaling 991,000 Bbl, according to data from Vortexa. The state took a total of 548,000 during the month of April, 417,000 Bbl in March, and 661,000 Bbl in February.
- The Gulf coast continues to reach wide to find feedstock for imports. The region is sourcing tallow from Australia, Brazil, New Zealand, and Uruguay. At least two tallow cargoes are poised to reach US Gulf coast destinations this month. Seven tallow cargos reached US Gulf coast destinations during the month of October. The December line up shows a Chinese UCO vessel and an Argentinian tallow cargo bound for the US Gulf coast.
- The US Gulf coast continues to import five to six cargoes of UCO each month, primarily from China, but also Vietnam and South Korea. UCO imports to the US Gulf coast totaled 511,000 Bbl of feedstock in September and 398,000 Bbl in October. A Chinese UCO cargo discharged in Louisiana last week, according to preliminary Vortexa data.
- The 5th US Circuit Court of Appeals ruled to block denials of SREs for six refineries. The SREs cover Calumet’s 57,000 Bbl/d Shreveport, Louisiana refinery, Placid Refining’s 75,000 Bbl/d Port Allen, Louisiana refinery, Ergon Refining’s 26,500 Bbl,d Vicksburg, Mississippi refinery, Ergon’s 23,000 Bbl,d West Virginia refinery, CVR’s 74,500 Bbl/d Wynnewood, Oklahoma refinery, and Allegiance Refining’s 21,000 Bbl/d San Antonio refinery. The court’s decision said the EPA’s blanket SRE rejection was “impermissibly retroactive; contrary to law; and counter to the record evidence.” The decision will add a bearish undertone to an already oversupplied marketplace, save for D3 credits.
- October total RIN generation came in at a record 2.1 billion credits, up 7.7% from the previous month when total RIN generation came in under 2.0 billion credits for the first time since April. D4 generation came in at under 733 million credits, up 9% from the previous month’s levels and up 54% from year-ago levels. Total D4 production reached 7.72 billion credits, overshooting the entire 2023 advanced biofuel mandate by nearly 1.3 billion credits. Domestic renewable diesel production accounted for 47% of total D4 output, foreign renewable diesel made up 11%. Domestic and foreign biodiesel accounted for 41% of total D4 output, down from 44% the month prior. SAF accounted for less than one percentage point.
- Marathon reported a fire on a flare stack at its Martinez, California, refinery. The Martinez refinery has been undergoing a conversion to a renewable diesel facility as part of a 50/50 joint venture with Neste. The project is expected to reach full capacity of 48,000 Bbl/d by the end of the year. The plant aims to run animal fat, SBO and DCO as primary feedstocks.
- Oregon released second quarter Clean Fuel Program (OCFP) showed renewable diesel as the top-credit generating fuel at 35 percent of total OCFP credit generation, taking quarterly generation to a fresh record. Renewable diesel and biodiesel combined made up 25 percent of the state’s diesel pool, demonstrating the increasing penetration of RD into Oregon. OCFP credits shed nearly $60/t ahead of the release of the report yet continue to trade at hefty premiums to California LCFS credits, making Oregon an economically advantaged destination depending on freight and logistics costs.
- Federal judges defended the EPA’s approach to setting the 2020-2022 blending mandates. US refiners have complained blend requirements were too high based on how the EPA adjusted blending targets to account for projected Small Refinery Exemptions (SREs). The EPA is also facing a separate lawsuit for its 2022 cellulosic biofuel requirement, with biofuel groups arguing that targets were set too low based on projections of actual production and not accounting for the availability of carryover credits for compliance. Refiners have also filed a series of lawsuits in the DC Circuit court challenging the EPA’s move to reject all outstanding SREs this year.
- HF Sinclair reported third quarter renewable diesel sales of 14,500 Bbl/d. The independent refiner is an obligated party in both Oregon and Washington state and operates RD facilities in Cheyenne, Wyoming, and Artesia, New Mexico.
- Calumet plans to add 3,000 Bbl/d of capacity to its 15,000 Bbl/d, Great Falls, Montana Renewables refinery by 2025. The Great Falls plant is currently undergoing repairs to a steam recovery system and moved forward a turnaround originally planned for 2024 to November. Calumet is mulling plans to ultimately maximize SAF production at the Great Falls facility.
- Louis Dreyfus aims to build a 1.5 t/year soybean processing plant in Upper Sandusky, Ohio with construction to begin in early 2024. The plant is expected to be completed by 2026 and will have a capacity to produce 320,000 t/yr of RBD soybean oil. Earlier this year, Louis Dreyfus said it will double the capacity of its canola crushing plant in Yorkton, Saskatchewan.
- A California judge ruled that P66’s 67,000 Bbl/d RD Rodeo facility may not operate until permitting issues are resolved. The largest RD refinery conversion in the country is allowed to continue construction. The original permitting work for the plant took nearly a year to complete in May 2022. P66 aims to begin RD production at Rodeo by Q1 2024.
- The US Energy Information Administration (EIA) raised its 2023 RD production forecast by 0.6% to 170,000 Bbl/d in its October Short-Term Energy Outlook. RD production for 2024 was forecast at 228,000 Bbl/d, up by 5.6% from the previous month’s estimate.
- The Washington Clean Fuel Standard posted a net credit surplus for the first quarter, according to the state’s inaugural quarterly report. A total of 275,442 credits were generated, with ethanol accounting for 64% of the total and renewable diesel making up 12%. Deficits came in at 227,768, for a quarterly surplus of 47,674 credits. The market reacted bearishly with prompt credits tumbling to $79/t from $101/t, or 22%, over the span of just a week.
- EPA Fuel Program Center Director, Paul Machiele, said the oversupply of D4 credits is not currently a concern at the EPA as the agency’s primary driver in setting the 2023-2025 mandates was feedstock availability, according to Carbon Pulse. Machiele noted that the surge in imported feedstock was not taken into account when considering the final Set Rule, speaking at the OPIS RFS, RINs and Biofuels Forum in Chicago. Changes to exiting mandates are unlikely to be taken up during an election year. President of Advanced Biofuels Association, Michael McAdams, cited an unnamed source that the earliest the EPA would take action is 2026.
- EPA officials indicated that the next opportunity for addressing the adoption of the contentious eRIN pathway would be when the agency considers blending targets for 2026, according to EPA Fuel Programs Center director Paul Machiele when speaking at the Argus North American Biofuels, LCFS, & Carbon Markets Summit in mid-September.
- CARB Releases Proposed 2023 Amendments in SRIA. On September 8, California’s Air Resources Board (CARB) released the Standardized Regulatory Impact Assessment (SRIA) containing ten proposed amendments for 2023. The SRIA proposed a 30% reduction in carbon intensity by 2030, including a 5% step-down in 2025. The SRIA contained an automatic acceleration mechanism (AAM) which would advance stringency for a given year when specific regulatory conditions are satisfied by advancing the carbon reduction target by two years. CARB proposed to eliminate the exemption for intrastate fossil jet fuel and phase out avoided methane crediting for dairy and swine manure pathways and for landfill-diversion pathways by 2040. CARB aims to limit RNG book-and-claim accounting, requiring fuels to be consumed in California. CARB proposed to expand ZEV infrastructure crediting to the medium- and heavy-duty sector. The proposal would allow for book-and-claim for low carbon intensity hydrogen. Project-based crediting for petroleum projects would be phased out by 2040. CARB proposed to decrease credits generated by forklifts less than 12,000-pound lift capacity. According to CARB models, a 5% step down (18.75% by 2025 mandate) would generate nearly 12 million deficits.
- Airlines reported 8-10 million tons of SAF across 59 offtake agreements between January 2022 and June 2023, according to data from International Air Transport Association (Iata). The Hydro-Processed Esters and Fatty Acids (Hefa) pathway accounted for 53% of the reported offtakes and 85% of global renewable capacity. Iata reported a SAF blend ratio of 30-40% since 2022.
- Calumet Specialty Products reported a leak in a steam recovery system at its Montana Renewables Facility. Calumet expects to produce 8,000-8,500 Bbl/d at its Great Falls, Montana, facility during the third quarter, and aims to complete repairs in mid-September. Untreated feedstock makes up 70% of throughput at the Montana Renewables Facility, with reported margins of $1.25-$1.45/gallon for July.
- US northeast energy supplier, Sprague Operating Resources LLC, announced August 15 that it is offering renewable diesel for both delivery and transport rack loading at their Bronx terminal, New York City’s largest storage and rack loading facility.
- CVR Energy Inc. aims to startup the pretreatment unit (PTU) at its Wynnewood, Oklahoma, refinery by the end of 2023. The plant has been running soybean oil and treated corn oil until the PTU enters service. A catalyst change during the second quarter saw throughput drop to 17.8 million gallons, down from 22.4 million gallons consumed during the first quarter. CVR estimates Q3 throughput of 17-22 million gallons.
- Vertex Energy Inc. reached 8,000 Bbl/d phase 1 capacity at its Mobile, Alabama, facility during the second quarter. Vertex received federal approval to generate D4 RINs earlier this year. The company announced its first sale of 110,000 Bbl to Idemitsu Apollo in June 2023. Vertex aims to move away from refined, bleached, and deodorized (RBD) soybean as a feedstock citing poor margin conditions. The company will increasingly use DCO, technical tallow, crude de-gummed SBO, and canola oil during the third quarter and is exploring the use of UCO and other fats and greases.
- Global Clean Energy secured a $110 million loan to proceed with construction of its Bakersfield, California renewable diesel facility. The project is behind schedule and has run more than $600 million over budget prompting ExxonMobil to nullify its offtake agreement. The 15,000 Bbl/d project is the site of the former Big West refinery and will use camelina as feedstock.
- The EPA denied 26 small refinery exemptions covering the 2016-2018 and 2021-2023 compliance years on July 14. The move was consistent with the EPA’s blanket SRE denials under the Biden Administration. The two remaining SREs are for the 2018 compliance year.
- Twelve broke ground on a commercial scale power-to-liquid eSAF facility on July 11. The facility is expected to produce 5 Bbl/d, or approximately 40,000 gallons per year, by mid-2024, with plans to rapidly increase capacity. Alaska Airlines, Microsoft, and Shopify already have offtake arrangements with the Moses Lake facility.
- ExxonMobil exited its renewable diesel offtake agreement with Global Clean Energy Holdings as the 210mn USG/yr is running behind schedule and overbudget. The energy giant originally stated it would take such action if no product was received by July 2022. The Bakersfield, California facility is slated to run on camelina oil. Global Clean Energy Holdings rejected the notice and stated it has until 30 November to complete the project, according to the Bakersfield Californian.
- Cargill announced it has put its Missouri soy crush facility on hold, citing market dynamics. The 62mn bushels per year facility was originally slated for completion in 2026.
- Marathon announced that it is on pace to complete Phase II of its Martinez Project with Neste by year end bringing total production capacity to 730 million gallons/yr. Phase I was completed during 1Q23 ramping up 260 million gallons/yr of renewable diesel capacity.
- Oleo-X launched a 300 million gallons/yr feedstock pretreatment facility in Pascagoula, Mississippi. The company aims to process low-carbon inedible oils and poultry fat.
- Par Pacific announced a $90 million investment to build a RD/SAF facility at its existing refinery in Kapolei, Hawaii. The facility is expected to produce 4,000 Bbl/d of RD and SAF as well as renewable naphtha and LPG by 2025.
- Parkland Corp. announced its decision to halt its renewable diesel project in British Columbia, Canada. The company had been coprocessing at its Burnaby Refinery with plans to build a 273,000 gallons/yr RD facility, set to come online in 2026. The company cited rising feedstock costs and advantages to US producers afforded by new credits carved out in the Inflation Reduction Act (IRA). The move could be a harbinger of slowing momentum for the RD industry which has increasingly worried about rising feedstock costs, while the numerous advantages of the US market are likely to open export markets soon.
- The Washington State Senate passed a Sustainable Aviation Fuel (SAF) tax credit, following actions from the state of Illinois which issued its own SAF credit with additional tax advantages for the fuel. Washington aims to establish a $1/gallon credit with a $2/gallon cap as additional value can be earned for fuels with lower carbon emissions. The Illinois SAF credit is set at $1.50/gallon and will run from June 1, 2023, through June 1, 2033, making the state the highest returning market for SAF.
- The UK received its first renewable diesel import on March 30 to Valero Cardiff following a decision to lift import tariffs on US RD. The move presages growing export opportunities for competitive US RD product.
- Shell scrapped plans for a 550,000 t/yr RD and SAF facility in Singapore. While no rationale was put forth, feedstock supply and the lack of mandates throughout the Asia Pacific region are likely culprits. While feedstock prices have been falling, recession fears have also been weighing on diesel values, limiting margin growth.
Renewable Diesel
US Gulf coast RD margins rose on tenuous diesel strength alongside mostly stable feedstock pricing. RINs were little changed, letting go of gains during Wednesday’s session as news of the ruling on the EPA’s denial of SREs spurred selling. LCFS markets posted gains at midweek entering the long Thanksgiving weekend.
UCO remained the highest returning feedstock, averaging a return of $2.34/gallon. Spot UCO prices at the US Gulf coast shifted sideways 45.50c/lb as import vessels continue to make their way to the regional production hub.
BFT margins rose $0.13/gallon, or 8.1%, to $1.66/gallon as spot BFT prices were stable at 52c/lb, marking the lowest level in over five months. At least two tallow vessels are scheduled to reach the US Gulf coast in November. Seven tallow import vessels reached the US Gulf coast over the course of October.
DCO margins firmed $0.09/gallon, or 6.8%, to $1.35/gallon. Aggressive DCO buying saw margins reach the lowest levels in four months in October as the feedstock was favored for its warm-weather properties.
SBO margins stabilized at $0.89/gallon, marking the lowest level since late July. Spot SBO prices rose 1.59c/lb, or 2.7%, to 59.60c/lb.
To recap: The week ended November 17 saw short-lived diesel strength propel renewable diesel margins higher alongside stable feedstock pricing. RINs prices firmed as the BOHO spread continued to press wider, yet lost ground during Friday’s session despite a pullback in diesel pricing. LCFS markets were unchanged during the week. Steady UCO, tallow and palm oil imports to the US Gulf coast worked to balance feedstock markets amid consistent demand. DCO RD margins tumbled to $1.26/gallon during Friday’s session.
The week ended November 24 saw tenuous diesel strength underpin renewable diesel margins alongside mostly stable feedstock pricing. RIN prices ended the week little changed as initial gains were lost at midweek on a court ruling overturning SRE denials. LCFS markets notched higher and a wider contango developed across the forward structure. Steady UCO, tallow and palm oil imports to the US Gulf coast worked to balance feedstock markets amid consistent demand. Gulf coast RD exports to California picked up pace this month, totaling over 1 million barrels.
Biodiesel margins, as measured by the soybean oil-to-heating oil (BOHO), reached as wide as $1.14/gallon as gains in the front-month CBOT SBO contract outpaced Nymex diesel. The BOHO spread was unchanged week-over-week at $1.13/gallon.
D4 RINs were little changed week-over-week as the SRE ruling spurred selling late during Wednesday’s session. The BOHO spread maintained a 0.29c premium D4 RINs.
The wider the BOHO spread, the weaker the margin as the main input cost for biodiesel producers, soybean oil, is more costly than the petroleum-based diesel fuel it competes with, compressing margin though the D4 RIN can contribute significantly toward making up for BOHO weakness.
The BOHO spread is a simplistic breakdown of the pulse of the biodiesel industry and is in widespread use by the industry. The BOHO spread does not account for operational costs which can vary drastically from plant to plant, nor the additional margin value afforded by credits and/or the sale of byproducts such as glycerin.
Environmental Credit Markets
RINs were little changed week-over-week as news on Wednesday of the approval of six SREs robbed the market of initial gains. The 2022 vintage market posted tempered gains amid the approaching compliance deadline, with the inter-vintage spread widening to 2-3c.
The 5th US Circuit Court of Appeals ruled on November 22, 2023, to block denials of SREs for six refineries. The court’s decision said the EPA’s blanket SRE rejection was “impermissibly retroactive; contrary to law; and counter to the record evidence.” The decision will add a bearish undertone to an already oversupplied marketplace, save for D3 credits.
Fresh government data showed a mounting oversupply of D4 credits.
October total RIN generation came in at a record 2.1 billion credits, up 7.7% from the previous month when total RIN generation came in under 2.0 billion credits for the first time since April.
D4 generation came in at under 733 million credits, up 9% from the previous month’s levels and up 54% from year-ago levels. Total D4 production reached 7.72 billion credits, overshooting the entire 2023 advanced biofuel mandate by nearly 1.3 billion credits. Domestic renewable diesel production accounted for 47% of total D4 output, foreign renewable diesel made up 11%. Domestic and foreign biodiesel accounted for 41% of total D4 output, down from 44% the month prior. SAF accounted for less than one percentage point.
D3 RIN generation fell 10% from the previous month and is running just 13% over year-ago levels compared to a 25% growth rate used by the EPA to set the 2023 final mandate.
The EPA denied 26 small refinery exemptions covering the 2016-2018 and 2021-2023 compliance years on July 14. The move was consistent with the EPA’s blanket SRE denials under the Biden Administration. The two remaining SREs are for the 2018 compliance year.
In February, United Refining was denied its SRE hardship waiver by the Third Circuit court, a move which would lead to additional demand to the marketplace. Trade organization Growth Energy entered comments in support of enforcing SREs in its case against the EPA. A full denial of all SREs would represent more than 1.6 billion RINs.
Prior to this, the approval by a federal court of a SRE for Calumet Special Products 30,000 b/d refinery in Montana provided bearish undertones to RIN markets.
SREs were carved out in the Renewable Fuel Standard (RFS) for refiners producing 75,000 b/d or less which could prove compliance with the RFS—i.e., purchasing RINs—resulted “undue economic hardship.”
The EPA retroactively overturned 69 Trump-Era SREs starting in April of last year by denying 31 SRE waivers for 2018 and then denying all SRE petitions for 2016 through 2020. Denying SREs is bullish for RINs markets as refiners must enter the marketplace to purchase RINs to cover compliance obligations which were originally waived.
A court ruling earlier this year halted compliance obligations for two refineries with existing SRE petitions taking issue with the retroactive nature of the SRE denial.
Notes from the court were strongly in favor of granting the SREs, as the court made it clear it intends to handle SREs as originally intended by the RFS—i.e., waive RFS compliance if undue hardship can be demonstrated—and to allow waivers which were issued in an “unlawful retroactive application.”
On June 21, 2023, the EPA issued a historic ruling establishing the demand curve for renewable fuel use for 2023-2025. This marks the crucial expansion years for the rapidly growing renewable diesel (RD) and sustainable aviation fuel (SAF) industry and fell well short of current and future production, dealing a blow to RD, SAF and BD industries.
The ‘Set Rule’ greatly underestimated the impact of surging renewable diesel growth, with the decision driven primarily by concerns over feedstock supply. In a glimmer of hope for the renewable diesel industry, the EPA left the door open for adjustments to the final ruling by taking into consideration a wide-ranging list of indicators.
LCFS Pricing
The California Low Carbon Fuel Standard (LCFS) market posted gains heading into the Thanksgiving weekend, with a more pronounced contango developing in the forward structure.
Prompt credits climbed $1/t, or 1.5%, to $68.00/t, with less pronounced gains along the forward curve.
The forward structure remained flat heading into 2024, while contango into Q2 2024 widened to $1.25/t and $0.75/t into Q3 2024.
The prompt market had been in a choppy holding pattern since early May yet initiated a material downtrend starting in early June. LCFS strength has been driven by trader buying and strength in futures markets as the credits become more attractive options ahead of CARB’s more stringent scoping plan. Buying quickly turned to selling once the workshops concluded as traders became disillusioned with the timeline for the rulemaking.
Materials provided showed CARB ahead of its last board meeting showed the regulator is considering a 30% reduction scenario with a 5% step down in 2025. A 25% reduction scenario with limitations to biodiesel use was considered but found to not displace enough fossil fuel. A 35% reduction scenario was also considered but found to be too costly.
CARB released a proposal ahead of its rulemaking which adopted a 30% carbon intensity reduction by 2030, curbed biogas contributions, and included an auto-acceleration mechanism. Traders now await the late-September board meeting for the next cues and the release of the final proposal for the state’s scoping plan.
During the August 16 workshop, California’s Air Resources Board (CARB) provided updated guidance on the timeline for its rulemaking process to usher in more stringent carbon intensity targets. The regulator aims to release a proposal after a late-September board meeting during which a non-voting LCFS item will be outlined. The proposal will face a 45-day public comment period allowing the item to be voted on at a board meeting in early 2024.
The new targets could come into effect by mid-to-late 2024, or CARB could wait till January 1, 2025. CARB clarified that it would not retroactively apply the ruling to any part of the 2024 compliance year.
The August 16 public workshop covered extensive modeling updates to its California Transportation Supply Model (CATS). The updated scenarios included material upward revisions in electrification of HDVs and MDVs, added in total out-of-state biomethane supply and built in a credit bank drawdown pathway. CARB did not factor alcohol-to-jet into the model as sufficient data was not available.
Stakeholders raised concerns that the electricity CI used in the model was too high and took issue with using total out-of-state biomethane (RNG) in the model, while not adjusting for out of state competition and restrictions.
LCFS prices add to margin value for product intended for California, which sets the clearing price for RD fuel in the US and Canada as California RD represents the maximum achievable price for the fuel. California consumes roughly +70% of RD produced in the US for this reason, while additional barrels are sent to Oregon which also has a LCFS program in place. Washington state credits have begun trading, with back-half 2024 WCFS credits valued around $105/t.
Final Notes
Renewable diesel and biodiesel margins reflect a complex interplay between conventional fuels, renewable feedstocks, logistics, environmental credits, and regulatory momentum. With at least 1.8 billion gallons of additional RD capacity slated to come online this year, the need for protection from margin erosion is paramount.
Hedging provides this insurance.
At the same time, established facilities conducting turnaround maintenance can benefit from locking in margins and feedstock costs. Less sophisticated facilities—for example, producers equipped to run only one or two high-cost feedstocks and lacking prime market access—stand to benefit most from AEGIS hedging and advisory functions by achieving the best price possible for their product alongside feedstock optimization strategies.
Renewable diesel and sustainable aviation fuel markets remain in revolutionary growth mode. The US Energy Information Agency projected RD capacity could more than double through 2025.
While returns narrow RD and SAF remain the highest returning products in the renewable space, rapid growth and regulatory changes will drive perpetual volatility.
AEGIS is here to help harness volatility to lock in predictable gains and prevent losses through innovative hedging strategies.
Important Disclosure: Indicative prices are provided for information purposes only and do not represent a commitment from AEGIS Hedging Solutions LLC ("Aegis") to assist any client to transact at those prices, or at any price, in the future. Aegis makes no guarantee of the accuracy or completeness of such information. Aegis and/or its trading principals do not offer a trading program to clients, nor do they propose guiding or directing a commodity interest account for any client based on any such trading program. Certain information in this presentation may constitute forward-looking statements, which can be identified by the use of forward-looking terminology such as "edge," "advantage," "opportunity," "believe," or other variations thereon or comparable terminology. Such statements are not guarantees of future performance or activities.