The crude price drop in late 2014 encouraged a large increase in domestic demand for gasoline in 2015, which led refineries to a strong year in margins. Distillate cracks weakened in 4Q, leading the way to a shaky quarter. Crude runs set seasonal records in every month as increased refining capacity and strong margins pushed refiners to ever increasing runs. During 2016, we expect to see refiners maintain the high level of crude runs and set another new record. Margins are likely to be weaker as US gasoline demand is expected to grow at a slower rate following the big jump in 2015 and as high distillate stocks persist. US Gulf Coast margins will be additionally compressed by higher prices for WTI and LLS relative to Brent. With distillate and gasoline stocks starting the year at high levels, exports will be key as refiners struggle to match the strong margins seen in the past few years.