US Cash Products-ULSD down on ample supplies, low demand

NEW YORK, Nov 18 (Reuters) - Ultra-low sulfur diesel softened in cash product markets east of the Rockies after inventory data showed that distillate stocks fell less than expected, traders said on Wednesday.

"At the end of the day, we still have very high inventories. Distillates fell less than expected and that is not bullish going into the winter," said Jason Schenker, president of Texas-based Prestige Economics.

In Midwest markets, waning agricultural demand also depressed ultra-low sulfur diesel differentials.

Traders and analysts noted that despite another drop in refinery utilization, inventories of both gasoline and diesel remain high, noting that refinery maintenance is starting to end and runs will likely pick up.

"U.S. Gulf Coast diesel is down on run increase expectations...and it doesn't have to be much of an increase. We are running at about the lowest level of the year and we still built last week," said one Gulf Coast diesel trader.

Both production and stocks of ultra-low sulfur diesel increased in the Gulf Coast's PADD III, with inventories up 200,000 barrels to 33.3 million, according to weekly government data.

A wet and cooler autumn delayed the Midwest's harvest, putting demand for diesel on hold, cutting back on the number of barrels pulled up from the Gulf.

U.S. crude oil futures fell in line with Wall Street, which was down on poor homebuilding numbers after trading around $80 a barrel. [O/N]

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