* Gulf gasoline gains 0.50 cent
* Group Three gasoline up on storm alert
* Chicago ULSD down 1.9 cents as buyer interest wanes
NEW YORK, July 28 Gulf Coast conventional gasoline and ultra-low sulfur diesel differentials seesawed on Thursday, making early gains that later reversed as traders saw Tropical Storm Don posed little threat to refineries on the Texas coastline.
Several companies shut in production at oil and gas platforms in the Gulf of Mexico, while coastal refineries from Corpus Christi to the Houston area monitored the storm. [ID:nN1E76R0IY]
The National Hurricane Center expected the storm to come ashore near Corpus Christi, Texas, area, home to three refineries: Valero's (VLO.N) 315,000 barrel-per-day (bpd) plant; Flint Hills Resources' 290,078-bpd plant; and Citgo Petroleum Corp's 163,000-bpd plant.
"We are monitoring Tropical Storm Don, and at this point we have not altered operations at any of our Gulf Coast refineries," said Valero spokesman Bill Day.
However, traders didn't anticipate significant storm-related interruptions.
Conventional gasoline differentials gained half a penny per gallon early Thursday, but ended the day down by the same amount. ULSD differentials also rose by half a cent per gallon and then retreated to be flat with Wednesday's levels.
A Gulf Coast refined products trader noted that the storm's winds, 45 miles per hour (72 km per hour) on Thursday, were expected to strengthen to up to 60 mph by the time it reaches landfall late Friday. That likely means little effect to refineries, the trader said.
"These refineries are designed to handle 140-150 mph winds," the trader said. "And storm surge is only expected to be about 2 feet, which isn't a problem, even to the beach houses and condos there."
Gasoline in the Midwest Group Three market was flat on Thursday after it rose a half cent in late Wednesday trading anticipating shut-ins because of the tropical storm in the Gulf of Mexico.
Further north, both gasoline and ultra-low sulfur diesel (ULSD) in Chicago fell on increased selling.
Chicago ULSD fell about 1.90 cents Thursday on top of its half-cent loss on Wednesday as buyers exited the market.
"Chicago diesel basis has become the dog of the market," a Midwest trader said.
Chicago gasoline fell 0.75 cents a gallon.
For more refinery news, please go to [REF/OUT]
U.S. GULF COAST <0#P-USG>
Cycle 43 conventional M2 gasoline was seen done at early Thursday 7.00 cents under September RBOB futures, up half a cent, but later retreated to 8.00 cents under, down half a penny on the day.
Cycle 43 61-grade ultra-low sulfur diesel gained half a cent to trade at 3.50 cents over September heating oil futures early Thursday, then retreated to 3.25 and 3.20 cents over, flat with Wednesday's levels.
Scheduling Cycle 43 54-grade jet fuel offered at 7.00 cents over, but later traded at 6.00 cents over, up about half a cent.
Newly prompt heating oil for Cycle 44 was flat at 4.25/3.75 cents under, trading at 3.85 cents under.
NEW YORK HARBOR <0#P-NYH>
Any-July M2 conventional gasoline was pegged at either side of 8.75 cents under August RBOB futures, unchanged, while early August M2 material was talked at 8.50/8.00 cents under September RBOB futures.
Any-July F2 RBOB was called 2.25/2.75 cents over. August ratable F2 RBOB was pegged at 3.00/3.50 cents over September RBOB futures.
Any-July CBOB was done at 13.00 cents under and was called either side of that level, while early August barrels were quoted at 13.75/13.75 cents under.
Any-August CBOB was pegged at 6.75/6.50 cents under, with a deal reported done at 6.60 cents under.
Any-July V2 premium conventional gasoline was talked at 8.25/8.75 cents over. Any-July H2 premium RBOB was pegged at either side of 23.00 cents over, down 2.00 cents from Wednesday's settlement.
Any-July PCBOB was pegged at either side of 7.50 cents over.
Any-July heating oil was talked at 0.75/0.50 cents under August heating oil futures.
Any-July ULSD was pegged at 7.25/7.75 cents over, while low sulfur diesel was called either side of 2.25 cents over for the same timing.
Any-July jet fuel was called 8.75/9.25 cents over and kerosene was pegged at 14.50/15.50 cents over.
MIDWEST <0#P-G3> <0#P-MC>
Group Three gasoline was flat at 7.50 cents under August RBOB gasoline futures while Chicago gasoline fell 0.75 cent to 5.25 cents under September futures.
Chicago ultra-low sulfur fell 1.90 cents to trade at 1.25/1.00 cents under the September heating oil contract on the New York Mercantile Exchange (NYMEX).
Group Three ULSD was flat at 6.75 cents over August heating oil futures.
(Reporting by Selam Gebrekidan and Jeffrey Kerr in New York and Kristen Hays in Houston; Editing by Lisa Shumaker)