US Cash Products-NYH heat oil sharply higher; mogas up

NEW YORK, March 24 (Reuters) - Cash heating oil was bid sharply higher in the New York Harbor on Monday as cold weather returned to the U.S. Northeast while immediate supplies are thin in the hub, traders said.

"Inventory is very low; marketers destocked too early," said one NY Harbor distillates trader.

"The inverses in the spread tell you to destock and the inverses started in January," he said, referring to the backwardated NYMEX heating oil futures complex.

With cool temperatures over most the northeastern states, demand for heating oil is expected to be nearly 10 percent above normal this week, the National Weather Service forecast in its weekly report. [ID:nN24350897]

Distillates inventories in the United States are down to their lowest level in more than two years while heating oil stocks in the PADD 1, or the East Coast, are off more than 27 percent from a year ago, the government said last week.

Gasoline differentials were higher in the U.S. Gulf Coast and parts of the Midwest on Monday, but trade was quiet in most hubs east of the Rockies with traders slow to return from the long Easter holiday weekend.

"I have not heard a number even discussed in March ... Nothing on F4 or M4," said a trader in the New York Harbor.

In refinery news, Exxon said the 135,000 barrel per day crude unit at its Baytown, Texas refinery is being restarted after planned work. [ID:nN24332137]

Valero is still running its gasoline-making FCC at its 210,000 bpd Delaware City refinery at reduced rates but the unit is due at planned rates soon.