N.Y. Diesel Strengthens Amid Speculation Europe Prices to Rise

New York diesel strengthened amid speculation that prices in Europe will rise to a record, increasing the incentive to export the fuel.

Retail diesel prices should reach a record high this week or early next week, Olivier Jakob, managing director of Petromatrix GmbH, a Switzerland-based researcher, said in a note today.

The premium for ultra-low-sulfur diesel in New York Harbor rose 0.25 cent to 13.13 cents versus heating oil futures traded on the New York Mercantile Exchange at 3:15 p.m., according to data compiled by Bloomberg. Prompt delivery gained 4.02 cents to $3.2542 a gallon.

Diesel barges in Europe’s wholesale market surged to a premium of $39 a metric ton to September gasoil on the ICE Futures Europe exchange on Aug. 14, the most since July 18, according to data compiled by Bloomberg.

Traders booked or plan to book 34 tankers, each hauling about 37,000 metric tons of the fuel, for loading in the next two weeks, according to a Bloomberg News survey of five shipbrokers and a trader yesterday and today. That would be the most since Oct. 27 and up from 21 a week ago.

The discount for conventional gasoline to be blended with ethanol, or CBOB, in New York Harbor versus futures traded on the New York Mercantile Exchange narrowed 0.37 cent to 2.13 cents a gallon. Prompt delivery gained 0.3 cent to $3.062.

The discount for conventional, 87-octane gasoline in the Gulf Coast widened 3.5 cent to 15.25 cents a gallon, a three-week low.

Exxon Mobil Corp. expects production at its Beaumont, Texas, refinery to be affected after a power failure yesterday caused multiple unit upsets. Power has been restored and the plant is resuming normal operations, Kathleen Jackson, a Beaumont-based spokeswoman for Exxon, said in an e-mail.

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