...Credit Profiles Largely Insulated: Refiner credit profiles should remain insulated in 2016. Fitch Ratings expects cash flow generation in 2016 to remain strong and balance sheets to be in good shape. Excess cash flow has generally gone toward share buybacks and dividend increases, but due to strong profitability and good fundamentals, this has not affected credit profiles. Flexibility Supports Stable Outlooks: The majority of capex plans are targeted at midstream and logistics subsidiaries, which generally have more stable cash flow profiles, varying degrees of self-funding, and can be utilized as a funding lever for sponsors. Large-scale refinery capex is mostly discretionary, and multibillion dollar projects have been shelved to focus on lower risk, high-return projects. Share buybacks can also be tapered fairly quickly in the event of a large shock to crude oil prices or crack spreads. Crude Supplies Remain Elevated: U.S. crude inventories remain well above historical averages, with...
