February 21, 2012 / 9:19 PM / 8 years ago

US Cash Products-Chicago gasoline surges, sellers absent

* Chicago gasoline surges with few sellers in market

* Chicago gasoline up 35 cents since Thursday

* Gulf Coast gasoline see-saws on pipeline scheduling

* Harbor jet fuel up 1.50 cents

NEW YORK, Feb 21 (Reuters) - Chicago cash gasoline rallied in afternoon trading on Tuesday, reversing its recent 11-year lows as few sellers were left in the market with changes to a cleaner-burning grade coming soon, traders said.

Gasoline differentials shot up by about 14.50 cents-a-gallon on the day to a bid-offer spread of 28.00/25.00 cents under the March RBOB futures contract on the New York Mercantile Exchange, traders said.

Last week, Chicago gasoline had dived to the lowest level in more than a decade as refiners brought a glut of winter-grade fuel to the market while demand remained suppressed. Midwest refiners are running near full-throttle to take advantage of lucrative margins brought on by cheap crude from Canadian and U.S. shale oil fields.

Differentials reversed course, however, when major sellers exited the market. They have since shot up by more than 35 cents a gallon as buyers sought scarce barrels. The market is expected to make the switch to lower Reid Vapor Pressure (RVP) gasoline in the coming weeks.

On the Gulf Coast, M4 winter-grade gasoline differentials gained slightly early, then turned south to end the day down by 0.75 cent per gallon at 2.75 cents under March RBOB futures as its latest five-day lifting cycle scheduled to move on the Colonial Pipeline, traders said.

Among Gulf distillates, ULSD and jet fuel differentials also moved on pipeline scheduling. ULSD fell half a cent per gallon to 0.55 cents under March NYMEX heating oil futures, while jet fuel differentials climbed half a cent a bid-offer spread of 0.50/1.50 cents over futures.

Space has been limited since last summer on the Colonial’s main gasoline and distillate pipelines, which transport refined products from the Gulf Coast to the U.S. Northeast.

In the New York Harbor, distillate markets were mixed in thin trading. Buyers lined up for barrels of ultra-low sulfur diesel, sending differentials up by 0.75 cent a gallon, while sellers actively sought buying interest for heating oil, which was offered 0.10 cent weaker.

Prompt jet fuel was done at 6.00 and 7.00 cents over and ended the day talked at either side of 7.00 cents over, up 1.50 cents.

The weekend restart of Hess Corp’s 70,000 barrel-per-day Port Reading, New Jersey, refinery kept the pressure on prompt gasoline markets in the New York Harbor, traders said.

Prompt F5 RBOB was done at 4.25 cents under the March RBOB futures contract on NYMEX, down 0.75 cent, while any-February barrels were done at 3.90 cents under, down almost a penny.

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U.S. GULF COAST

Scheduling Cycle 12 M4 gasoline was seen done early at 2.25, 2.00 and 1.75 cents under March RBOB futures, up a quarter cent, but later reversed course and ended the day down by 0.75 cent at 2.75 cents under.

Scheduling Cycle 11 61-grade ultra-low sulfur diesel was seen done at 0.25 cent over, up a quarter cent, then fell to end the day at 0.55 cent under, down half a cent.

Scheduling Cycle 11 54-grade jet fuel slipped a quarter cent to half a cent under to half a cent over, then gained half a cent by day’s end to 0.50/1.50 cents over.

Heating oil for Cycle 12 fell half a cent to 5.00/4.50 cents under.

NEW YORK HARBOR

Prompt and any-February heating oil were pegged at 1.00/0.60 cents under, down 0.10 cent from Friday’s settlement.

Prompt and any-February low-sulfur diesel was talked at either side of 1.00 cent over, up a quarter cent.

Prompt and any-February ULSD were done at 3.75, 3.85 and 4.00 cents over and the market was called 3.75/4.25 cents over, up 0.75 cent on the day.

Prompt jet fuel was done at 6.00 and 7.00 cents over and ended the day pegged at 6.50/7.50 cents over, up 1.50 cents from Friday’s settlement.

Prompt F5 RBOB was done at 4.25 cents under and ended the day pegged at 4.50/4.00 cents, down 0.75 cent, while barrels loading by Feb. 24-25 were done at 3.75, 3.65, 3.50, 3.35, 3.50 and 3.60 cents under.

Any-February F5 RBOB was done at 3.90 cents under, down 0.75 cent.

Ratable March F4 RBOB was done at 19.00 and 19.25 cents under and ended the day talked at 19.50/19.00 cents under April RBOB futures, down 1.50 cents.

Prompt M4 conventional gasoline was pegged at either side of flat to the screen, up a half cent, while any-February barrels were talked at 0.25/0.75 cent over, also up a half cent.

MIDWEST

Cycle 3 Chicago gasoline rose 14.50 cents to a bid-offer spread of 28.00/25.00 cents under March RBOB gasoline futures.

ULSD in Chicago rose 1.25 cents to 33.00/31.00 cents under March heating oil futures.

Group Three gasoline rose 1.50 cents a gallon to 11.25/10.75 cents under March futures while ULSD rose a half cent to 7.50/7.00 cents under.

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