US Cash Products-USG diesel supported by exports

NEW YORK, June 11 (Reuters) - U.S. Gulf diesel differentials perked up slightly as European demand for ultra-low sulfur barrels continues to replace price supports traditionally supplied by Midwest agricultural demand, traders said on Wednesday.

Trade sources reported at least three cargoes of 61-grade ultra-low sulfur diesel leaving the Gulf Coast this week for Europe as poor fuel oil cracks have simple refiners cutting back on runs.

"I'm hearing freight is higher but not sure how many cargoes are going transatlantic although it could work for on-spec products," said another Gulf Coast trader.

In the Midwest, the spring planting season has been delayed by historic rainfall and flooding, keeping demand for diesel lower than normal.

"There is way too much water and even if it is drier next week, it won't matter now, it's too late to plant corn," said one grain analyst. [ID:nNT344005]

Futures prices soared with crude rising $6 to trade over $137.31 a barrel. Benchmark heating oil and RBOB contracts also gained.

For refinery outages, click [REF/US]

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

Newly prompt cycle 35 M2 conventional gasoline inched up by about a penny to 16.00/15.75 cents under the screen as high prices for the motor fuel continue to pare demand.

Cycle 34 ultra-low sulfur diesel gained half a cent, talked at 3.00/3.50 cents over the July heating oil screen while 74-grade low sulfur fuel was seen a penny down at 0.50/1.25 cents over.

Traders said that cargoes of ultra-low sulfur diesel leaving the region have fallen off because of specification differences.

However, one industry source said three are booked to leave this week to Europe.

NEW YORK HARBOR <0#P-NYH>

Prompt M2 conventional differentials rose with few barrels offered, sending bids up to 9.00 cents under the benchmark July print up from talk at about 11.50 cents under a day earlier, traders said.

M2 gasoline traded at 10.75 cents under for barrels by June 15th, up from about 12 cents under.

"There's no product, it's a timing issue more than anything," said one NY Harbor gasoline trader. Asked what delivery dates were tight, he said: "Through the 15th-17th (of June) timing, after that it seems to get cheaper."