US Cash Products-Midwest Group Three ULSD up on harvest

NEW YORK, Nov 6 (Reuters) - Group Three ultra-low sulfur climbed about a penny on Thursday amid strong agricultural demand against a weaker heating oil futures benchmark, traders said.

Harvest has been delayed by unfavorable weather in many Midwestern states. For instance, only 11 percent of corn in North Dakota was harvested by Nov. 2, compared to 73 percent for the same time last year and many other states have had similar delays. [ID:nAPI000532]

"Obviously, the demand has peaked in various terminals in the Midwest," said TEPPCO'S spokesman Rick Rainey.

"What we're seeing this year is usually high."

Earlier on this week, a spokesman for Magellan Midstream Partners LP (MMP.N) said some of its terminals were experiencing short-term outages of ultra-low sulfur diesel.

In the Harbor, demand for heating oil was thin. Heating oil stocks in the East Coast, PADD I, jumped by 5.5 percent last week, and as a result, the year-on-year deficit narrowed to 21.4 percent, Stephen Schork, editor of The Schork Report, said, citing government data issued on Wednesday.

Unseasonably warm temperatures in Northeastern states are keeping demand thin for the heating fuel while ample supplies hit the hub from the Gulf Coast.

"Needless to say, the inventory situation in the East is still tight," Schork said, as supplies are below year ago levels. "But, on the other hand, the NYMEX heating oil term structure has hardly budged. In other words, constraints aside, futures traders are not concerned regarding supply."

U.S. crude futures dropped $5 per barrel on Thursday amid worries that a slowing global economy will pressure demand. Benchmark December heating oil and gasoline futures also slipped, with heating oil down about 10 cents and RBOB falling about 8 cents. [O/N]

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

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

Scheduling cycle 63 heating oil on the Colonial Pipeline was offered at 5.50 cents under the December heating oil futures screen, but warm weather in the Northeast heating oil market and shipping restrictions set bids at 7.75 cents under.

"A wide box. That's why it's so quiet," said one heating oil trader.

Other distillates were seen in range with newly prompt cycle 63 61-grade ultra-low sulfur diesel trading at 0.25 and 0.50 cents over the screen with anys pegged at 0.50 cents under to flat to the Merc.

Same cycle 74 grade was up slightly on a weaker screen, trading at 4.50 cents under the screen.

Prompt M4 conventional gasoline traded at midday at 4.00 cents under the NYMEX RBOB futures screen, after earlier trade at 4.50 cents and 3.25 cents under.