US Cash Products-Mogas steady to higher as supply tightens

NEW YORK, May 28 (Reuters) - Cash gasoline differentials east of the Rockies were steady to a little higher on Thursday as supplies continued to tighten, dealers said.

National gasoline inventories dropped for the fifth week in a row as demand rose in the week preceding Memorial Day holiday, according to a weekly government report.[EIA/S]

Gasoline inventories dropped 600,000 barrels to 203.4 million barrels, smaller than a forecasted 1.5-million-barrel fall, the Energy Information Administrations's data showed.

The slide in gasoline inventories came as refineries ramped up their production ahead of summer, with utilization rates up 3.3 percentage point to 85.1 percent of capacity.

Crude oil inventories fell 5.4 million barrels to 363.1 million barrels in the week ended May 22, dwarfing the 700,000-barrel decline analysts had forecast, the EIA said.

Differentials in Group Three are likely to move higher as barrels that would normally go to the Group are diverted to Chicago to meet the demand.

U.S. crude oil futures climbed about $1 on Thursday on news that crude inventories slid last week. [O/N]

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

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