US Cash Products-USG diesel surges; NYH heatoil firm

NEW YORK, Jan 8 (Reuters) - ULSD diesel in the Gulf Coast surged a nickel on Thursday on talk of exports while heating oil in the New York Harbor added to gains as an extended cold snap in the Northeast was seen boosting demand, traders said.

"We are looking at at least a 15-day cold snap coming in," said one distillates trader in the NY Harbor. "It's been years but its finally here."

Forecasters have said that the U.S. Northeast and Midwest can expect an extended winter chill, including bitter cold temperatures next week near zero in Chicago and in the low teens in major Northeastern cities. [ID:nN06414916]

"The overnight weather runs have turned colder again, with even the 6-10 day forecast showing some more extreme variances that will boost heating demand for next week," Tim Evans, an analyst with Citi Futures Perspectives said in a note.

In the Gulf Coast, differentials for prompt 61-grade ultra-low sulfur diesel moved into the positive after holding at a discount to the NYMEX heating oil contract since late November on poor demand.

"It's up on export talk," said one Gulf Coast broker.

Trade sources said that South America was one of the destinations among others. But one shipping source said export levels of the fuel have not changed.

Exxon reported a brief snag and maintenance on FCC boilers at its Baytown, Texas, refinery which prompted an adjustment to the gasoline-making unit's operations. [ID:nN08537131]

U.S. crude oil futures edged lower in seesaw trade. [O/N]