November 16, 2018 / 5:16 PM / a month ago

U.S. Midwest diesel sinks to near 10-month low as demand slips

NEW YORK, Nov 16 (Reuters) - Ultra-low sulfur diesel cash differentials in a region of the U.S. Midwest have sunk to the weakest level since late January as demand has fallen with the end of the harvest season, traders said.

* ULSD ULSD-DIFF-G3 in Group Three, a region that includes several Midwestern states, traded on Friday at 2.50 cents per gallon below the heating oil futures benchmark on the New York Mercantile Exchange. The product reached 4.25 cents per gallon above futures in October, highest since Nov. 6, 2017.

* Diesel demand typically rises in the fall months during farmers’ harvest season.

* A potential influx of supplies from the Gulf Coast could further weigh on Group Three prices in Group Three, one broker said.

* U.S. Gulf Coast diesel prices have slumped to the lowest since January and are below Group Three prices, leaving a window to ship fuel into the region open.

* 62-grade ULSD on the Gulf Coast ULSD-DIFF-USG traded at 9.50 cents per gallon below futures, weakest since Jan. 18.

* The heating oil futures benchmark on NYMEX was at the highest seasonally since 2014 on Friday, last trading at about $2.08 a gallon. Lower U.S. distillate inventories have raised concerns about tighter supplies going into the winter demand season. (Reporting by Stephanie Kelly Editing by Susan Thomas)

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