Platts assessed ULSD for barge or Buckeye Pipeline shipment at November NYMEX heating oil contract plus 3.0 cents/gal, down 50 points from Friday. The assessment was based on a trade during the Platts Market On Close assessment process. Buckeye Energy bought a 25,000-barrel parcel of ULSD for November plus 3 cents/gal from Vitol.
Market players said despite the open arbitrage between the US and Europe and news of tightening European diesel supplies, ULSD prices remained stagnant.
"There have been increased export opportunities, but those have not yet had any impact on US pricing," said one trader.
Another market source said the French strikes and the subsequent impact on that country's oil sector could mean less demand for ULSD in the US.
"The port closures there are a problem. Ironically, maybe when the strike is over we will see the demand pick up. They are running down inventories at the moment," said the source.
A strike at the two oil terminals at the French Mediterranean port of Marseille -- Fos and Lavera--moved into its 22nd day Monday. Meanwhile, a refinery strike entered its seventh day with nine of 11 active French refineries either closed or in the process of curtailing production (story 1202 GMT).
Opportunities to export US ULSD to France remains challenging said another trade source. "
Almost all of the ULSD here does not meet France's specifications, which is "one of the hardest in Europe to meet," said a US Gulf Coast-based trader.
Last week, trade sources said market talk of increased exports to Europe boosted prices, but on Monday ULSD differentials gave back gains.
The rest of the distillate complex remained unchanged or lower with the exception of ultra-low-sulfur kero differentials, which gained 2 cents/gal for an assessment of November plus 18 cents/gal for barge shipment. Traders said thin supplies bulked up prices for the product, which have not breached the 18 cents range since September 1.
Jet fuel differentials were down 25 points at November plus 50 points/gal while No. 2 heating oil differentials slipped 15 points to November minus 1.75 cents/gal.
On the NYMEX, November heating oil settled 4.53 cents higher at $2.2761/gal; the Platts 3:15 PM ET heating oil assessment was $2.2740/gal.
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