US Cash Products-ULSD up on exports and NYMEX futures drop

NEW YORK, May 1 (Reuters) - Ultra-low sulfur diesel price differentials rose in most markets east of the Rockies on Thursday, countering sinking futures and reflecting export demand to Europe and South America, traders said.

After a recent correction from a spike, ULSD differentials ahave been on the rise again since the start of this week, especially in the New York Harbor, its values driven higher by a combination of exports and lack of sellers in the spot market, traders said.

"ULSD is still strong in Europe and South America," said a a distillates trader in the New York Harbor where differentials were as much as 4 cents above Wednesday's levels.

"The arb is open to Europe and few cargoes are sailing from the East Coast to Europe and South America," the trader said.

European traders cited talk of 4-6 cargoes, mostly 61-grade ULSD, due to move to Europe from the U.S. Gulf Coast, ultimately headed to the Mediterranean market.

In refinery news, Shell Oil said on Wednesday it expects an 88,000 barrel-per-day coking unit at its Deer Park, Texas, refinery to be back to normal rates by early next week pending the repair of a sulfur recovery unit. [ID:nN30538521]

A fire at Holly's (HOC.N: Quote, Profile, Research) 24,700 bpd Woods Cross, Utah refinery was extinguished early Thursday. [ID:nN01514757]

U.S. crude oil futures fell more than $2 and products futures following suit with June heating oil falling as much as 7 cents, or more than 2 percent. Analysts said oil futures were pressured partly by concerns about oil demand, especially in the United States, being curbed by high prices. [O/N] [O/R]

U.S. GULF COAST <0#P-USG>