Diesel Sinks to Lowest Since November as Supply Concern Fades

Diesel futures fell to the lowest level since November on higher supplies and warming weather in the eastern U.S.

Prices slipped 0.2 percent. Temperatures in New York City will climb to 57 degrees Fahrenheit (14 Celsius) on March 15 from a low of 20 today, according to AccuWeather Inc. Distillate stockpiles around New York Harbor rose to a six-week high as of March 7, Energy Information Administration data show. Nationwide, inventories expanded 880,000 barrels over the past four weeks after dropping 11.9 million in the previous five.

“Diesel is being weighed down as winter comes to a close and we had a relatively small distillate inventory draw over the last several weeks,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.

Ultra low sulfur diesel for April delivery fell 0.59 cent to $2.9196 a gallon on the New York Mercantile Exchange, the lowest settlement since Nov. 19 and the fourth straight loss. Volume was 5.6 percent below the 100-day average as of 4:03 p.m.

Distillate supplies in the central Atlantic, or PADD 1B region, rose 507,000 barrels to 14.3 million last week.

Diesel’s crack spread versus West Texas Intermediate crude narrowed 46 cents to $24.42 a barrel. The premium over European benchmark Brent increased 38 cents to $15.23.

Gasoline inventories declined 5.23 million barrels to 223.8 million last week, the lowest in 10 weeks, as refiners sold off stocks of winter-grade fuel to make way for summer grade, which is more expensive to blend. Demand over the past four weeks was 0.3 percent below a year earlier, EIA data show.

’Not Good’

“The four-week demand was not good at all,” said Andrew Lebow, a senior vice president at Jefferies Bache LLC in New York.

April-delivery gasoline fell 2.29 cents, or 0.8 percent, to settle at $2.9329 a gallon on volume that was 10 percent above the 100-day average. Gasoline’s premium to ULSD slipped 1.7 cents to 1.33 cents.

“Gasoline made an enormous run versus heating oil so there’s probably some profit taking,” Lebow said.

The motor fuel’s crack spread versus WTI dropped $1.17 to $24.98 a barrel. Its premium to Brent slipped 33 cents to $15.79.

The average U.S. pump price rose 1.4 cents to $3.504 a gallon, the highest since Sept. 17, according to data from Heathrow, Florida-based AAA. Drivers are paying 20.2 cents less than a year ago.

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE