US Gulf sees rising demand for diesel exports

By CHRISTINE HARVEY

Diesel futures rose, heading for the highest level in nearly three weeks, on speculation greater demand for exports will draw down US stockpiles of the fuel.

Futures climbed as much as 0.6%. Shipments abroad from the US Gulf Coast, home to more than half of the nation’s refining capacity, climbed 22% to a total of 33 in the week ended May 16, according to shipbroker Charles R. Weber Co. US distillate stockpiles were at 113 million bbl as of May 9, the lowest level since April 18, government data showed.

“For diesel, demand for exports remain very robust and that’s providing support for prices,” Gene McGillian, an analyst and broker for Tradition Energy in Stamford, Connecticut, said by phone.

June-delivery diesel advanced 1.67 cents to $2.9703/gal on the New York Mercantile Exchange. Prices touched $2.9725, the highest intra-day level since April 29, according to data compiled by Bloomberg.

Diesel’s crack spread versus West Texas Intermediate crude narrowed 19 cents to $21.93/bbl, while the motor fuel’s premium to European benchmark Brent widened 28 cents to $14.35.

Voyages from the Gulf Coast to Europe totaled eight last week, while those to Latin America were “largely stable” at 12, a weekly report from Greenwich, Connecticut-based Charles R. Weber showed. Ships calculated in the report are transporting refined products including diesel and motor fuel.

Gasoline for delivery next month rose 1.13 cents, or 0.4%, to $2.9848/gal. The motor fuel’s crack spread versus WTI crude declined 33 cents to $22.54/bbl. The motor fuel’s premium to Brent gained 10 cents to $14.50.

The average US pump price was unchanged at $3.646/gal, according to data from Heathrow, Florida-based AAA.