Connor Lynagh: That’s helpful. I will turn it back. Thank you.
Operator: Your next question comes from the line of Matthew Blair from TPH. Your line is open.
Matthew Blair: Hey. Good morning. I think you are in 13% heavy barrels in the quarter. Could you talk about what’s driving WCS wider currently and what your outlook is going forward?
Tim Go: Yeah. Matthew, this is Tim. We are definitely seeing and pleased with the wider WCS spreads. We are seeing that as a result of some of the return to normal production in Canada. I think we always thought that the WCS/WTI spread would widen here in the fourth quarter associated with that. But I think what surprised us is some of the unplanned events that have occurred in the Mid-Con that has impacted demand for WCS, as well as some of the quality choices that are occurring for crudes. Naphtha, of course, is very weak right now, as well as some of the fuel oil barrels that are weak right now that are competing for the WCS demand, which is lowering that overall demand and causing the spread to widen. We see that going forward into 2023.
We still see the production, as well as some of the quality differentials driving the higher than what we call maybe transportation differential kind of dynamics and we think that we will be able to benefit from that. In the third quarter, we ran a little bit less heavy that was mostly associated with the Osage event that occurred. We have all the economic incentives to increase our WCS production and as you may have heard as a rule of thumb for every $1 a barrel WCS change, we typically see about a $40 million annual EBITDA impact in our business.
Matthew Blair: Sounds good. And then your Q3 capture rate basically held flat at 69%, so nice work there. Do you think the outlook for the Q4 capture rate actually might be a little bit higher quarter-over-quarter just given tailwinds from wider WCS is, as well as things like butane blending and octane spreads?
Tim Go: Yeah. We are encouraged by all of that, Matthew. I would say, typically, as we get into the winter months, our capture rates tend to go down, but that’s generally because of utilization that goes down because some of the RVO percentage of gross margin is higher. But as you point out, we are certainly going into the — here we are in November. We are certainly looking stronger this fourth quarter. Utilization is high and with the wider crude diffs, as you pointed out, with the strength in the diesel cracks as you pointed out, we do think capture rates should stay higher here in the fourth quarter.
Matthew Blair: Great. Thank you.
Operator: And your next question comes from the line of Jason Gabelman from Cowen. Your line is open.
Jason Gabelman: Hey. Thanks for taking my questions. I first wanted to ask on the Renewable Diesel business. You mentioned some, I think, unplanned downtime, I may have missed it if it was planned, but due to a catalyst change out in that Renewable Diesel business. And I know the industry has had some issues during start-ups that have come through in terms of going through the catalyst quite quickly. Was the catalyst change out a result of that or any other types of operational issues, and if so, do you have your hands wrapped around that or is everything okay in that segment? And then my other question was just on the lubricants business, a big quarter-over-quarter decline. I know some of that was due to accounting for higher feedstocks. Could you just kind of discuss the puts and takes, maybe the order of magnitude of that inventory impact and where margins are trending in that business? Thanks.
