US Cash Products- NYH heat oil, Gulf Coast ULSD gain

NEW YORK, Jan 10 (Reuters) - Heating oil in the New York Harbor, the world's largest market for the fuel, inched up on Thursday, although warmer weather in the region has kept a ceiling on prices, traders said.

In the U.S. Gulf Coast, cleaner-burning ultra-low sulfur diesel gained as interest in shipping barrels to Northwest Europe and the Mediterranean supported a higher price, traders reported. Other traders, however, said that a lack of available ships hampered product flow.

Ship traffic on the Houston Ship Channel, which had been blocked by fog overnight and though the morning, began moving around midday Thursday.[ID:nN10356949]

The Colonial Pipeline, which transports products out of the U.S. Gulf Coast, began limiting shipping space on its gasoline and distillate lines for the 4th 5-day cycle of the year. [ID:nN10184016] [ID:nN10176668]

Gasoline in the Midwest's Chicago hub gained on Thursday, while in the Group Three hub, values inched lower, in what traders called a seasonally choppy market.

The region has recently been inundated with supplies of gasoline as demand dipped seasonally, according to traders.

On the New York Mercantile Exchange, U.S. crude futures slid on market worries of an economic slowdown.

For NYMEX reports click [O/N].

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

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

Differentials for 74-grade low sulfur diesel dropped over 2 cents from Wednesday's level, talking at 8.00 cents under the NYMEX heating oil screen, traders said.

Ultra-low sulfur diesel prices were higher, with bids at 5.00 cents under the screen.

Cycle 4 88-grade heating oil gained a quarter point from Wednesday's level, trading at 7.50 cents under the the NYMEX February heating oil screen.

Conventional cycle 4 M4 grade gasoline continued to be range bound, trading at 6.25 cents under the February RBOB screen. F4 was seen trading at a 1.25 cent premium to M4 or 5.00 cents under the screen.

NEW YORK HARBOR <0#P-NYH>

Heating oil was 0.20 cent firmer with barge sellers at 0.80 cent under February futures, while pipeline barrels traded at 0.75 cent under. However, above or near average temperatures forecast near-term for the U.S. Northeast are seen keeping a lid on demand while ample distillates supply makes its way up from the Gulf Coast.