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Diesel Futures Rally From Nine-Month Low; Crack Spreads Widen

April 18 (Bloomberg) -- Ultra-low-sulfur diesel futures advanced for the first time in seven days as part of a broader rally in commodities. Crack spreads widened.

Futures rose 1.6 percent, after dropping 7.7 percent in the prior six days to a nine-month low. The fuel’s crack spread versus May WTI widened 82 cents to $28.99 a barrel. The June spread versus Brent gained 19 cents to $17.13.

Products are “firming up a little on the sense we fell too far too fast,” said Phil Flynn, senior market analyst at Price Futures Group in Chicago.

Ultra-low-sulfur diesel for May delivery advanced 4.45 cents to $2.7791 a gallon on the New York Mercantile Exchange, after settling yesterday at the lowest level since July 10. Trading volume was 10 percent above the 100-day average.

The Standard & Poor’s GSCI Index of 24 materials was up 1.2 percent at 3:10 p.m. in New York.

The Energy Information Administration reported yesterday that inventories of distillates, including heating oil and diesel, increased 2.36 million barrels to 115.2 million.

PADD 1 gasoline supplies rose 674,000 barrels last week to 60 million, a six-week high. Gasoline’s crack spread versus May West Texas Intermediate widened 6 cents to $28 a barrel. The June spread versus Brent fell 27 cents to $16.30.

Gasoline for May delivery rose 2.65 cents, or 1 percent, to settle at $2.7555 a gallon on volume that was 9.3 percent above the 100-day average for the time of day.

Gasoline at the pump, averaged nationwide, fell 0.7 cent to $3.512 a gallon, AAA said today on its website. Prices have fallen 27.4 cents from this year’s high of $3.786 on Feb. 26 and are 38.7 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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