US Cash Products-Distillates mixed despite stock draw

NEW YORK, Nov 19 (Reuters) - An unexpected draw in U.S. distillates inventories pushed up the futures benchmark with New York Harbor cash heating oil keeping pace due to increased demand due to cold Northeast weather, traders said Wednesday.

Midwest diesel prices edged higher but slowing demand and increased production pushed differentials down along the Gulf Coast, traders added.

However, a slowdown in the pace of demand destruction for distillates is seen keeping a floor under the price fall.

"Generally, recent data indicates that low prices are taking the edge off demand losses," said one Gulf Coast trader.

Despite an uptick in heating oil stocks in the Northeast -- the world's largest user of the fuel -- overall distillate stocks in the United fell in part to a fall off in imports into the country.

U.S. crude futures fell back Wednesday morning after government data showed crude supply rose sharply, offsetting a counter-seasonal overall drawdown on distillates. [O/N]

The restart of a crude unit at Marathon's 70,000 barrel per day refinery at Texas City, Texas was expected to pressure gasoline cracks further, traders said. [ID:nN19323986]

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

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

Scheduling cycle 65 61-grade ultra-low sulfur diesel slipped on the stronger screen in thin trade, to trade at 1.00 and 1.25 cents under stronger December heating oil screen despite a 400,000 drop in the region's inventories last week.

"I heard that 1.50 (cents under) was done, but no one can seem to confirm, so ignoring for now," said one trader.

On Tuesday, trade was done at 0.50 cents under before moving down to talk at 0.90/0.60 cents under.

Newly-prompt cycle 66 conventional gasoline traded at 4.25 cents under the falling benchmark RBOB December futures before moving to trade at 3.75 cents under, down from the 3.60 cents under seen on Tuesday.

NEW YORK HARBOR <0#P-NYH>

As a cold snap boosts demand, cash heating oil added to Tuesday's gains, last offered at 0.25 cents over the higher benchmark December futures, which rose on news of an unexpected drop in U.S. distillates stocks last week, according to government data.

Asked if more demand was seen going forward, a distillates trader in the hub said: "Yes as long as cold weather is sustained."