* Gulf gasoline down as demand wanes, grade switch looms
* Chicago ULSD pares decline
* Harbor markets mixed as traders wrap February business
HOUSTON, Feb 29 (Reuters) - Gulf Coast gasoline differentials extended declines on Wednesday as demand waned for the transitional winter-to-summer grade that will be phased out next month.
M3 gasoline differentials fell by 2.00 cents per gallon to 23.00 cents under the April RBOB futures contract on the New York Mercantile Exchange, traders said.
The M3 grade will phase out in March as the cleaner burning, lower Reid vapor pressure (RVP) M2 summer grade takes over. M2 was seen done Wednesday at 18.50 cents under, traders said.
Gulf Coast ultra-low sulfur diesel differentials climbed a slight 0.25 cent per gallon to a quarter cent under April NYMEX heating oil futures, while jet fuel differentials talked at even to the board to a penny over with no deals seen done.
In the Midwest, Group Three gasoline and ULSD differentials shrugged off tornadoes that spared refinery infrastructure as they ripped through at least four states in the region late Tuesday.
Group Three gasoline was flat at 7.25/ 7.00 cents under March futures while and Group Three ULSD held at 5.75/5.50 cents under the March heating oil screen, traders said.
Chicago ULSD, however, rose a cent a gallon to 32.00/30.00 cents under April NYMEX heating oil futures, partly rebounding from a sharp drop of 3.00 cents per gallon on Tuesday with few sellers left in the market.
In the New York Harbor on Wednesday, cash distillate markets were mixed as traders wrapped up February business and began March trade and no clear trends, traders said.
Any-February heating oil was down a quarter cent per gallon at either side of flat to the March NYMEX heating oil futures, while early March heating oil was unchanged at a slight premium to the April heating oil futures contract on NYMEX in limited trade.
Prompt March jet fuel was offered at 6.50 cents over, with bids seen at 5.75 cents over, down 0.75 cent per gallon, while prompt March ULSD climbed a quarter cent per gallon to 4.25/4.75 cents over.
East Coast gasoline stocks fell by 1.5 million barrels last week, according to the U.S. Energy Information Administration’s weekly inventory data release on Wednesday, but cash gasoline markets in the region shrugged it off as traders focused on closing books on February trade.
Any-February F5 RBOB was unchanged at either side of 2.50 cents under the March RBOB futures contract on NYMEX, and early March F4 RBOB was flat at 2.75/2.25 cents under April RBOB futures. Early March F5 RBOB was called 22.00/21.50 cents under, down a half cent.
The EIA said U.S. distillate and gasoline stocks each fell last week as refinery utilization decreased.
U.S. distillate stocks fell 2 million barrels to 141.4 million barrels while gasoline stocks slipped 1.6 million barrels to 229.9 million barrels, the EIA said.
The drop in East Coast gasoline inventories drove the overall decline in U.S. inventories. East Coast distillate stocks fell by 685,000 barrels, the EIA said.
Midwest distillate and gasoline stocks each fell, by 355,000 barrels and 548,000 barrels, respectively.
However, Gulf Coast distillate and gasoline stocks each showed gains. Distillates rose by a slight 92,000 barrels, and gasoline inventories were up by 792,000 barrels, the EIA said.
U.S. refinery utilization dropped 1.9 percentage points to 83.6 percent last week on various upsets as well as ongoing spring maintenance.
Gulf Coast utilization slipped 2.3 percentage points to 85.6 percent, reflecting in part reduced rates of a gasoline-making fluid catalytic cracking unit at Shell Oil Co’s joint-venture 327,000 barrels-per-day (bpd) refinery in Deer Park, Texas.
Midwest utilization fell 1.8 percentage points to 94.2 percent as ConocoPhillips reported a sulfur plant F-train trip at its joint-venture 362,000 bpd refinery in Wood River, Illinois.
But East Coast utilization showed a slight uptick of 0.7 percentage points to 58.3 percent as Hess Corp’s 70,000 bpd refinery in Port Reading, New Jersey, had resumed normal operations upon wrapping up planned work.
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Cycle 14 m3 gasoline was seen done at 21.00, 22.00. 22.75 and 23.00 cents under April RBOB futures, down 2.00 cents.
Cycle 15 M2 gasoline was seen done at 18.50 cents under.
Cycle 13 61-grade ultra-low sulfur diesel was seen done at 0.25 cent under the April heating oil screen, up a quarter cent.
Newly prompt Cycle 14 jet fuel talked at flat to the screen to a penny over, up half a cent.
Cycle 14 heating oil was steady at 5.25/4.75 cents under.
Any-February heating oil was called either side of flat to the March heating oil futures contract, down a quarter cent, while early March heating oil was pegged at flat to 0.50 cent over the April heating oil contract.
Prompt March ULSD was pegged at 4.25/4.75 cents over, up a quarter cent, while any-March barrels were talked at 4.00/4.50 cents over, unchanged.
Prompt and any-March jet fuel were pegged at 5.75/6.50 cents over, down 0.75 cent.
Prompt and any-March kerosene were called 8.00/9.00 cents over and March ultra-low sulfur kerosene was talked at 11.50/12.50 cents over.
Any-February F5 RBOB was pegged at 2.75/2.25 cents under March RBOB futures, unchanged, while early March F5 RBOB was called 22.00/21.50 cents under April RBOB futures. Early March F4 RBOB was talked at 2.75/2.25 cents under.
F4 RBOB loading by Mar. 10 was pegged at 2.00/1.75 cents under, while barrels loading by Mar. 13-15 were talked at 18.50/18.00 cents under.
Ratable March F4 RBOB was called 20.00/19.50 cents under, unchanged, while ratable April F2 RBOB was talked at flat to 0.50 cent over May RBOB futures.
Prompt March M4 conventional was called 0.50/1.00 cent over April RBOB futures, while any-March barrels were pegged at 17.00/16.50 cents under.
Cycle 1 Chicago gasoline was flat at 17.00 cents under April NYMEX RBOB gasoline futures while ULSD rose a cent a gallon to 32.00/30.00 cents under.
Group Three gasoline was seen at 7.25/ 7.00 cents under March futures, while Group Three ULSD was steady at 5.75/5.50 cents under the March heating oil screen.