US Cash Products-most distillates firm despite build

NEW YORK, July 9 (Reuters) - Most distillates differentials firmed Thursday in the U.S. Gulf Coast and New York Harbor amid buying interest spurred by a contango price structure in benchmark heating oil futures, traders said.

Despite a jump last week in U.S. stockpiles of distillates, including diesel and heating oil, to a 25-year high, cash values have generally firmed in most markets east of the Rocky Mountains since Wednesday, supported also by news of problems at Valero Energy Corp.'s (VLO.N) Ardmore, Oklahoma, refinery.

ULSD diesel in the Gulf Coast rose about a penny and a half on Thursday while New York Harbor heating oil added a penny, and jet fuel firmed in both hubs. Ultra-low sulfur diesel in the Midwest's Group Three hub rose slightly, brokers noted.

Asked to explain the unseasonal strength in Harbor heat oil, a trader said: "There's room in tanks and lack of selling. It's gotten weak enough for people to have buying interest."

Valero said the crude unit and an FCC unit at its Ardmore refinery were still not producing while a naphtha hydrotreater remains shut after a Saturday fire.

Valero also said on Thursday its 275,000-barrel-per-day Aruba refinery has begun the process of a planned two- to three-month shutdown due to economic reasons. [ID:nN09456571]

Exxon Mobil Corp (XOM.N) said production was not affected by a Wednesday snag with a gasoline-making fluid catalytic cracker unit at its 562,500-bpd Baytown, Texas refinery, according to a company filing. [ID:nN09441783]

BP restarted a crude vacuum unit at its 160,000-bpd Toledo, Ohio, refinery this week, a source said. [ID:nN08404658]

U.S. crude oil futures reversed course and fell below $60 a barrel Thursday morning. [O/N]

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

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

Newly-prompt cycle 40 61-grade ultra low sulfur diesel jumped a penny and a half to trade at 2.50 and 2.25 cents over the August heating oil screen.

Buying interest in contango storage barrels continue to dominate the market, with renewed mid-continent interest from Valero's shut hydrotreater at Ardmore, Oklahoma, refinery after a weekend fire.

Jet continued to rise, talking at 5.00/6.00 cents over the August screen although trade was hard-pressed to find a fundamental reason for the high price.

"In a better organized world, you wouldn't have a 5 cent carry between months and if shipping economics didn't prevail, refinery economics would," said one trader, who characterizes the price of jet as too high.

Prompt cycle 40 conventional M2 gasoline slipped half a cent in morning trade from 7.75 cents under the August RBOB contract to 8.25 cents under.