"New York [ULSD price] is following the Gulf Coast lower and because it is so weak in the Gulf Coast people are shipping it themselves to New York," said one trade source about the pressure on ULSD prices.
With the Colonial Pipeline fully allocated, the trader said arbitrage into New York is open and product continues to flow into the harbor.
Platts assessed ULSD for barge or Buckeye Pipeline delivery at November NYMEX heating oil plus 2.75 cents/gal -- the lowest level since February, according to Platts data. On Friday ULSD differentials were assessed at November plus 3.75 cents/gal.
Still, market sources said ULSD differentials typically weaken near the end of the year. "Then it pops back up in January and February," said the trader.
Another market source suggested prices could be gearing up for news about the US economy to be released Friday.
"The government number on durable goods will be released Friday and that could show that the trucking industry is down," the source said.
Traders in the New York market showed no reaction to news of a 15-day strike at two oil terminals in the French Mediterranean that has adversely impacted production there and could lead to an increase in diesel exports from New York to Europe (story, 1450 GMT).
The rest of the distillate complex followed ULSD lower with jet fuel assessed at November plus 1 cent/gal, down 25 points from Friday. No. 2 heating oil for barge or Buckeye Pipeline shipment was assessed at November minus 2 cents/gal, down 25 points.
On the NYMEX, November heating oil settled 29 points lower at $2.2790/gal; the Platts 3:15 ET PM assessment of the same contract was $2.2790, down 73 points.
China Chemical Weekly: http://news.chemnet.com/en/detail-1411716.html
