US Cash Products-USG diesel up amid dearth of sellers

NEW YORK Nov 23 (Reuters) - ULSD diesel in the U.S. Gulf Coast rose two cents against a firmer futures benchmark Monday, as few sellers were matched with motivated buyers looking to cover ahead of the long Thanksgiving holiday weekend.

In the New York Harbor, ultra low sulfur diesel price differentials also firmed, up about a penny from Friday levels.

But overall trade in the Harbor was thin and most cash oil products were seen reacting little to Friday's news that Valero has begun permanently mothballing its Delaware City refinery as the weak economy batters the refining sector. [ID:nN20224848]

"Well their (Valero's) line is that they will make up most of the shortfall from their other refineries and given the glut of distillates here in the U.S. and around the world the news has had little effect so far," said a New York Harbor trader.

In other refinery news, Valero said on Monday it restarted the second of three coker modules that underwent maintenance at its 325,000-barrel-per-day refinery in Port Arthur, Texas. [ID:nN23255432]

Husky Energy was in the process of restarting its 160,000-barrel-per-day refinery in Lima, Ohio, a company spokesman said Monday. [ID:nN23214122]

Late Friday, BP reported an ultracracker malfunction at its 475,000-bpd Texas City, Texas, refinery [ID:nN20246025] Citgo said it was restarting the gasoline-making FCC unit at its 156,000-bpd Corpus Christi, Texas, refinery after a power blip Thursday. [ID:nN2053745]

Also on Friday, Valero said flaring due to the shutdown of a hydrodesulfurization unit at its 340,000 bpd Corpus Christi refinery due to bad weather conditions did not impact production. [ID:nN20241239]

In NYMEX dealings, U.S. crude oil futures rose sharply on the back of a weak dollar, expectations for better economic growth and tensions surrounding Iran's air defense war games on Sunday. Gasoline and heating oil futures also firmed. [O/N]

For a complete list of refinery outages, click [REF/US]

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Prompt cycle 66 61-grade traded at 2.50 cents under the December heating oil screen, up from the 4.45 cents under seen on Friday.

Gasoline drifted around Friday's levels, with prompt M4 conventional gasoline seen at 7.00, 7.25 and then 6.50 cents under the December RBOB screen.

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M5 regular conventional gasoline for any month barrels was steady to a quarter cent higher at 1.50 cents over the December RBOB board, traders said.

F5 RBOB was set at 1 cent under for anys, also flat. H5 PBOB fell to 7 cents over the print, down about a quarter cent, while V5 premium was steady at 8 cents over, traders added.

Heating oil was offered at 3.25 cents under the December heating oil futures, down a quarter cent from Friday.

Temperatures in the Northeast are seen averaging near to above normal during the next five days, according to private forecaster DTN Meteorlogix.

"Plenty of supply, still no weather to sustain a market," a trader said.

ULSD diesel was asked at 1 cent under the December print, up about a penny, while low sulfur diesel was offered at 2.25 cents under, down a quarter. Jet fuel lost at least half a penny, at either side of 0.75 cents under

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Group Three gasoline was up by 0.50 cent to 0.75 cent, trading at 1.75 under the December RBOB screen after talking at 1.75/1.25 cents under, traders said.

Chicago cycle 3 gasoline gained as well, talking at 6.00/5.00 cents under the board, traders said. The latest figures compared with Friday's 8 cents under.

Group Three ultra-low sulfur diesel steady to a quarter cent lower, talking at 0.75 cent under to even with the board, while Chicago ultra-low sulfur diesel gained 0.25 cent at 2.25/1.75 under, traders said.

Prompt buyers of ultra-low sulfur diesel likely were covering weekend needs ahead of the Thanksgiving holiday amid still-healthy harvest demand that is "beginning to wane and soon to be done," a trader said. (Reporting by Haitham Haddadin in New York, Janet McGurty in Toronto, and Kristen Hays in Houston) ((haitham.haddadin@thomsonreuters.com; Reuters Messaging: haitham.haddadin.reuters.com@reuters.net; 646 223 6045)) ((For help: Click "Contact Us" in your desk top, click here [HELP] or call 1-800-738-8377 for Reuters Products and 1-888-463-3383 for Thomson products; For client training: training.americas@thomsonreuters.com ; +1 646-223-5546)) ++++++++++++For marketnews double click on+++++++++++++ General oil market [O/R] Energy market reports index [PRO/E] European products [CRU/C] U.S. GUIDES: ENERGY <CRUDE/1> <PRODUCT/1> FUTURES: reports [O/L] [O/N] [O/S] - prices <0#LCO:> For latest prices on large pages double click on: OILOIL NYMOIL IPEOIL OILSPD OILARB CRDWLD PRODEUR PRODUS IPEMERC EPROD USPROD APROD GASOIL