Oct. 21 (Bloomberg) -- Diesel in the Midwest rose to the highest level since June as demand by farmers and North Dakota oil operations dried up supplies at some Magellan Midstream Partners LP terminals.
Recent demand for diesel “at our terminals in North Dakota has been very high,” said Bruce Heine, a spokesman for the company. “As a result, we have encountered some short-term outages. The outages can last a few hours or in some cases, a few days.”
The premium for ultra-low-sulfur diesel in the Midwest, or Group 3, gained 0.87 cent to 8 cents a gallon versus futures traded on the New York Mercantile Exchange at 2:35 p.m., according to data compiled by Bloomberg. Prompt delivery fell 0.08 cent to $3.1005 a gallon.
“Between the oil fields, road construction, mining, and the harvest,” demand in North Dakota has grown, said Mike Rud, executive director of the state’s Petroleum Marketers Association.
The oil fields use 2 million to 3 million gallons of diesel a day for drilling and trucking, he said. North Dakota has surpassed the billion gallons it consumed last year, according to Rud.
Magellan was loading diesel in Fargo, North Dakota, today and the company’s pipeline and terminals are operating normally from a mechanical standpoint, Heine said.
The premium for ultra-low-sulfur diesel in Chicago rose 0.5 cent to 5 cents a gallon versus futures, the highest level since Oct. 4.
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