ANALYSIS-Exports keep U.S. diesel prices above gasoline

By Janet McGurty

NEW YORK, Feb 11 (Reuters) - U.S. diesel prices are running at an unusual premium to gasoline, a historically odd relationship that may become the norm due to strong growth in global demand for the fuel.

The shift may lead domestic oil refiners, which have tended to focus heavily on producing gasoline to meet U.S. motorist demand, to invest in units that can make exportable diesel for the domestic and world market.

"I think the economics will draw refiners to higher levels of diesel fuel production over time. The fact that the U.S. imports gasoline and exports diesel is a good indicator that the market is increasingly calling for more diesel and refiners will have to make this investment," said Kevin Lindemar, an analyst with Global Insight.

U.S. diesel prices have jumped 84.5 percent in a year to $3.28 a gallon -- compared to the jump in gasoline prices of 78 percent to about $2.97 a gallon, according to the U.S. Energy Information Administration.

The surge in diesel prices follows a move by the U.S. Environmental Protection Agency mandating a cleaner form of the fuel which is more costly to produce and which is also more readily exportable to the European market and other diesel-hungry regions.

"You do have areas of the world, like Europe, where the passenger car fleet is heavily weighted to diesel," said Kevin Lindemar, an analyst with Global Insight in Massachusetts.

Before the cleaner diesel mandate, much of the diesel produced in the United States fell far short of European fuel specifications, which meant the fuel tended to stay in the United States, keeping stockpiles full and prices low.

U.S. distillate inventories, which include diesel, jet fuel and heating oil, are running about 9 percent below last year's levels, while stockpiles of gasoline have swelled to nearly a 14-year high, according to EIA figures.