Ultra-Low-Sulfur Diesel Futures Advance as Gasoil Strengthens

Ultra-low-sulfur diesel futures jumped to a three-week high as gasoil in Europe strengthened. Crack spreads widened.

Futures rose as much as 0.9 percent. Gasoil jumped on the ICE Futures Europe exchange, indicating greater demand need for distillate exports from the U.S. ULSD’s crack spread versus West Texas Intermediate crude widened $1.38 to $27.87 a barrel. The premium over Brent increased 82 cents to $18.01.

“Europe continues to attract exports and higher prices mean it will attract more distillate exports to meet their demand,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.

Ultra-low-sulfur diesel for June delivery rose 2.02 cents, or 0.7 percent, to $2.9404 a gallon at 10:12 a.m. on the New York Mercantile Exchange. Trading volume was 54 percent above the 100-day average. Prices have risen 5.4 percent in four days of gains.

Gasoil for delivery in May gained $10, or 1.2 percent, to $868.75 a metric ton, while the more actively traded June contract increased $7.5 to $870.25. Trading volume on all gasoil contracts was 71 percent above the 100-day average.

Gasoline for June delivery fell 2.12 cents, or 0.7 percent, to $2.8445 a gallon on the Nymex on volume that was 26 percent below the 100-day average for the time of day. The fuel’s crack spread WTI narrowed 5 cents to $24.15 a barrel rose $1.14 to $24.20 a barrel, while the spread to Brent fell 62 cents to $14.28.

Gasoline at the pump, averaged nationwide, rose 0.4 cent to $3.525 a gallon, AAA said today on its website. Prices, which reached a year-to-date high of $3.786 on Feb. 26, and are 25.2 cents below a year ago.

To contact the reporter on this story: Barbara Powell in Dallas at bpowell4@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

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