US Products Outlook-Diesels up on exports, fire

NEW YORK, April 7 (Reuters) - Diesels across markets east of the Rockies are expected to gain value this week on continuing distillate exports to Europe and South America, traders said Monday.

A fire at Neste's Porvoo refinery last week has increased European import demand for distillates, traders said.

"It's the gas oil situation in Europe that's pushing up NYMEX heating oil. Distillate prices there have shot up amid refinery maintenance and a fire at Neste's Porvoo refinery in Finland," said Tom Knight, a trader at Truman Arnold in Texarkana, Texas.

A fire last Friday at the 206,000 barrel per day refinery, which is an exporter of diesel fuel to parts of Europe as well as the U.S, was seen underpinning diesel differentials.

"It feels like they need the juice and will pay what they need to get it," one Gulf broker said of rising distillate prices in Europe.

In the Midwest, ultra-low sulfur diesel prices were expected to gain as spring planting demand ramps up while the Magellan pipeline system, which supplies the region, experiences some short-term outages.

"We are experiencing a few short-term outages of x-grade (ultra-low sulfur diesel) at some outlying terminals," said Bruce Heine, a spokesman for the Magellan Pipeline, which carries gasoline and diesel from the U.S. Gulf Coast up through the Midwest.

Gasoline values were expected to firm in the New York Harbor as slow output from refineries due to planned maintenance and discretionary cuts in production eats into gasoline supplies.

The largest refiner in the U.S., Valero Energy Corp. (VLO.N) announced earlier this month that it has reduced its gasoline-making capacity to about 73 percent of total capacity.

In the Midwest's Group Three market, high stockpiles in the Magellan pipeline are expected to depress gasoline values.

With inventories of 6.9 million barrels, or 29 days of supply, the Magellan pipeline is carrying 1.6 million barrels more than it did during the same period last year, traders said. (Reporting by Rebekah Kebede and Richard Valdmanis)