US Cash Products-gasoline mixed as futures surge

NEW YORK, Oct 21 (Reuters) - Cash gasoline was mixed Wednesday in markets east of the Rockies against an RBOB futures rally after the government said national motor fuel stockpiles fell sharply for a second week, traders said.

The Energy Information Administration said U.S. gasoline stocks declined by 2.3 million barrels to 206.9 million last week as imports fell and demand rose. The decline follows a massive 5.2 million barrel drop the prior week [ID:nN21494475]

Analysts agreed that the draw was bullish but also noted that inventories remain high overall.

"Looking at the bigger picture, of course, the glutted supply situation is still much more bearish than bullish - although the gasoline over-supply has eased in the last few weeks," a Gulf Coast-based market watcher said in a note.

Gasoline values firmed a tad in the New York Harbor but eased in the U.S. Gulf Coast, according to cash oil traders.

Colonial Pipeline allocated gasoline shipments for cycle 61 on its main pipeline from the U.S. Gulf Coast as demand for shipping space exceed line capacity. [ID:nN21442098] It made a similar announcement for distillates for the same cycle in moves which keep product pooling in refinery row.

Chicago gasoline offers eased after strong gains Tuesday on talk Exxon was doing work on the alkylation and gasoline-making catalytic cracker units at its Joliet, Ill. refinery.

"The rumors persist but they are not seen as buyers," said one trader, adding Valero, Shell and Marathon were bidders in the Midwest.

Trade sources did say Exxon is beginning three weeks of work on the Joliet VDU but a company spokesman was not immediately available to comment. [ID:nN21338135]