Diesel futures retreated on speculation cargoes arriving from Western Europe and Russia will replenish supplies in the U.S. Northeast that have been drawn down by frigid weather.
Imports to the U.S. East Coast jumped 70 percent to 314,000 barrels a day in the week ended Jan. 24, the most since February 2010, according to Energy Information Administration data. Stockpiles of diesel and heating oil near New York Harbor, where the contracts are delivered, are the lowest since 2008.
“The problem with heating oil is the market has already priced in the tight supplies,” said Amrita Sen, chief oil market strategist at Energy Aspects Ltd., a research company in London. “Imports are likely to remain high from Russia and Europe the next couple of weeks.”
Ultra low sulfur diesel for March delivery fell 2.46 cents, or 0.8 percent, to settle at $2.9829 a gallon on the New York Mercantile Exchange. Trading volume was 23 percent above the 100-day average at 3:07 p.m.
Supplies of distillate across the U.S., including heating oil and diesel, probably fell 2.5 million barrels last week, according to the median estimate of 10 analysts in a survey by Bloomberg. The EIA is scheduled to report last week’s inventories tomorrow.
Diesel’s crack spread versus WTI, a rough measure of refining profitability, narrowed $1.79 to $28.09 a barrel. The premium over European benchmark Brent fell 77 cents to $19.50.
March-delivery gasoline slipped 0.38 cent to settle at $2.6031 a gallon on volume that was 26 percent below the 100-day average.
Supplies probably rose 1.15 million barrels last week, according to the survey.
The motor fuel’s crack spread versus WTI narrowed 92 cents to $12.14 a barrel. Its premium to London-traded Brent crude gained 10 cents to $3.55.
The average U.S. pump price fell 0.5 cent to $3.274 a gallon, according to data from Heathrow, Florida-based AAA. Prices are 24.9 cents below a year ago.