US Atlantic Coast ULSD differentials dropped more than 1 cent/gal in Thursday morning trade on lower export volumes and a high outright price.
Atlantic Coast ULSD was heard offered at the NYMEX October heating oil futures contract plus 8 cents/gal for the Buckeye Pipeline and New York Harbor barges. Bids were heard at 6.50 cents/gal.
Market information pegged Atlantic Coast ULSD at plus 7.75 cents/gal, down 1.50 cents/gal from Platts assessment Wednesday.
"ULSD is weaker for sure," a New York trader said.
A combination of factors may have led to a decline in differentials recently, a Houston trader said.
"Too high a flat price, lack of extra exports, and finally starting to build some supply," the trader said.
At 12 p.m. EDT (1600 GMT), the NYMEX October heating oil futures contract was at $3.2117/gal, placing the outright price for Atlantic Coast ULSD at $3.2942/gal.
The lack of extra exports was due to lack of demand for them, the trader said.
"Wherever they have been sending exports, it is not happening to any great degree now," he said.
US ULSD exports in June fell 3.322 million barrels from May to 22.528 million barrels, according to the latest data from the US Energy Information Administration.
