But those that are using naphtha in higher-cost regions are probably challenged at this point. Our teams are running hard, running well, taking advantage and are well positioned to actually benefit from this low-margin environment because of the feedstock we are in. So with that, we still think, though there is some more lifting to do with regard to getting the supply-demand balance where it needs to be, but if we can continue to see some green shoots like the GDP that we saw earlier this week, maybe you put a couple of those together, and we can start moving that forward.
Operator: Thank you. Joe Laetsch from Morgan Stanley. Please go ahead. Your line is open.
Joe Laetsch: Hi team. Thanks for taking my questions. So, I wanted to just start on the demand side. So, recognizing the DOE demand data has been really volatile, could you just share what you are seeing in your system across gasoline, diesel and jet? And then if possible, just your outlook for the remainder of the year, realizing that it’s really volatile right now. Thank you.
Brian Mandell: Hey Joe, this is Brian. Let me take a stab at that. In the U.S., inventories remain low for distillate, 17% under 5-year averages. Gasoline has come back up now close to 5-year averages. So, maybe starting on the distillate side, cracks are now in the mid to high $20 range when adjusted in U.S. Gulf Coast, New York and Europe. To be reminded, European refiners need distillate cracks at higher levels because of the higher net gas price to incentivize production. We are seeing distillate demand globally at about 2% higher than last year. In the U.S., we will start – we see demand a little bit off, although we have been watching the manufacturing sector, and we think it’s probably bottomed. Truck tonnage index has begun to rebound as an example.
So, for – on our outlook for diesel, we would say it’s supported from here with the low inventories and potential shortages in Europe. And as a reminder, this is Europe’s first year without Russian distillate supply, so we will have to watch that as well. And on the gas cracks, gas has been coming along for a ride as refiners have produced – continue to produce diesel with the strong diesel margins. We have also had butane blending startup, which has increased the volume of gasoline. And the summer has kind of been devoid of any hurricane issues. What we have seen is, especially on the Gulf Coast, we started to see plants cutting FCC units. So, we think that will be a help to clearing up the gasoline. On the demand side, we are seeing global gasoline 2% year-over-year and particularly strong, Asia and Middle East, Europe, about flat.
U.S. demand seems to be about flat, too. Latin America has been really strong, about 5% over last year. So, on our outlook for gasoline, we would say demand relatively flat through the end of the year as the markets work to clean up some of the gasoline supply.
Joe Laetsch: Got it. Thanks. Appreciate your response on that. And I just wanted to ask, on the dividend, so we have – it was good to see the increase in the target. We have touched on the buyback a bit. But could you just remind us how you are thinking on dividend growth from here?
Mark Lashier: Yes. Our position there is consistent, secure growing dividends. We have grown the dividend every year since spin, and that’s not going to change.
Joe Laetsch: Great. Thanks. Appreciate it today.
Mark Lashier: You bet.
Operator: Thank you, Joe. This concludes the question-and-answer session. I will now turn the call over to Mark Lashier for closing comments.
