US Cash Products-USG, Group Three ULSD jumps on refiner buying

NEW YORK, July 8 (Reuters) - Ultra-low sulfur diesel differentials in the U.S. Gulf Coast and Group Three markets jumped on Wednesday after news of problems at Valero Energy Corp.'s (VLO.N) Ardmore, Oklahoma, refinery.

Group Three ultra-low sulfur diesel moved up 1.75 cents over the August heating oil board, while Gulf Coast 61-grade also gained as barrels headed up from the region to the Midwest.

Valero said on Tuesday that the crude unit at its Ardmore refinery was not producing while a naphtha hydrotreater was shut after a Saturday fire in the latter. [ID:nN07343247]

The grades gained despite news that distillate inventories in the United States jumped in the week to July 3 hitting a near 25-year high, Energy Information Administration (EIA) weekly data showed on Wednesday.[EIA/S]

Distillates, which include diesel and heating oil, rose 3.7 million barrels to 158.7 million barrels the EIA reported. Analysts had called for a 2 million barrel build.

U.S. gasoline inventories added 1.9 million barrels to 213.1 million barrels in the week preceding the July 4 Independence Day holiday weekend, when summer travel traditionally peaks.

Refinery utilization fell 0.2 percentage point to 86.8 percent capacity against expectations for a 0.1 percentage point decrease.

Crude oil futures slipped 3.8 percent on Wednesday, despite news of a build in crude oil stocks in the EIA report as the oil complex was pressured by news of the product builds.[O/N]

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

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

Scheduling cycle 39 61 grade ultra low sulfur diesel gained as buyers were seen taking barrels to storage due to the continuing contango, cargoes and shipping to the midcontinent due to Valero's shut hydrotreater at Ardmore, Oklahoma, refinery after a weekend fire.

61-grade traded at 1.00 cent over the August heating oil screen, after trading at 0.75 cent yesterday after 0.50 cent was done during market on close trading.

Newly prompt cycle 40 conventional M2 gasoline traded up a penny on a weaker benchmark, trading at 7.50 cents under the August RBOB contract slipping another half cent from Monday's levels.

Lower RVP M1 traded at a 5.25 cents over M2.

NEW YORK HARBOR <0#P-NYH>

Conventional M2 gasoline edged higher, with 134e cycle barrels for July 11-13 pegged at 3.50 cents under the sharply lower August futures, up from 3.75 cents under late Tuesday.