US Products Outlook-NYH diesel to ease on imports

NEW YORK, March 17 (Reuters) - Ultra low sulfur diesel is seen under pressure near-term in the New York Harbor after a run-up in values attracted at least 5 diesel import cargoes from Canada, Venezuela and Russia, traders said on Monday.

But a recent decline in U.S. distillates supplies, which is likely to deepen further, will put a floor under price differentials across the middle of the barrel, they said.

"Cargoes are coming this way," said one Harbor trader, seconding views from others that ULSD was seen easing further.

"It (ULSD) ran up too much and is pulling import cargoes into the market," a second Harbor distillates trader said.

Traders said a number of vessels carrying ULSD and LSD are headed to the U.S. Atlantic Coast -- including two to three cargoes from Canada set to arrive over the next 15 days.

The vessels also include a Venezuelan cargo as well as a Russian cargo said to be looking for a bid for early April, they said. Diesel cargoes are typically 250,000 barrels each.

"The Russian is 0.2 (percent sulfur diesel) ... The offer is in early April for now I hear," the trader said. "Venezuela has a ULSD and possible 0.5 (percent sulfur diesel)."

Until recently, the United States was a net exporter of diesel to a very strong market in Europe. Traders estimated that at the peak in February between 350,000 to 400,000 barrels per day of diesel flowed across the pond to European markets.

"Most everything went the other way which helped cause the big run up," said a distillates trader in the U.S. Gulf Coast.