Ultra-low sulfur diesel futures rose, following Brent crude higher. The fuel’s crack spread versus West Texas Intermediate widened.
Futures gained as Brent oil on ICE Futures Europe exchange jumped 1 percent to $111.08 a barrel. ULSD’s crack spread versus Brent narrowed 14 cents to $17.81 a barrel, while the premium to WTI increased $1.08 to $31.82 as the Brent-WTI spread widened after Exxon Mobil Corp. shut a pipeline that ships crude from Illinois to Texas.
“The Pegasus pipeline shutdown seems to have turned the spread around and Brent being stronger versus WTI is giving products a pop,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut.
Ultra-low-sulfur-diesel for May delivery rose 2.17 cents, or 0.7 percent, to settle at $3.0687 a gallon on the New York Mercantile Exchange on volume that was 17 percent below the 100-day average at 2:49 p.m.
ULSD’s discount to gasoline narrowed 3.08 cents to 3.28 cents. Today is the first day that all contract months represent ULSD, rather than heating oil.
“Heating oil is up more than gasoline today because it tracks WTI more closely,” McGillian said.
Gasoline weakened on speculation that refinery unit restarts in the New York Harbor market will increase supplies. The crack spread versus WTI narrowed 23 cents to $33.19 a barrel while the premium to Brent fell $1.45 to $19.18 a barrel.
The premium of May gasoline over June narrowed 0.76 cent to 1.94 cents a gallon. Philadelphia Energy Solutions was starting units at the Girard Point section of its 355,000-barrel-a-day refinery last week following a 60-day turnaround that began in late January.
“Everything has returned from turnaround on the East Coast and refineries have been increasing operating rates, adding to supply,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.
Gasoline for May delivery fell 0.91 cent, or 0.3 percent, to settle at $3.1015 a gallon. Trading volume on the Nymex was 15 percent below the 100-day average at 2:52 p.m. Prices fluctuated between $3.0732 and $3.1425.
Today is the first day of trading since March 28 because the market was closed March 29 for Good Friday. Most European businesses are closed for Easter Monday.
“Europe is essentially closed,” said Andrew Lebow, a senior vice president at Jefferies Bache LLC in New York. “Volume is light and it’s easy to move the market round.”
Gasoline at the pump, averaged nationwide, fell 0.5 cent to $3.634 a gallon, AAA said today on its website. Prices are 29.1 cents below a year earlier after falling in March for the first time in 10 years, according to AAA data.