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Diesel fell in Chicago for the sixth straight day as lower agricultural demand hasn’t supported a jump in prices following refinery outages last month.
The worst U.S. drought in 56 years has reduced crop yields in millions of acres of U.S. cropland and pasture, hurting demand for Chicago diesel.
Ultra-low sulfur diesel in the Chicago spot market sank 2.87 cents to 8.38 cents a gallon over heating oil futures traded on the New York Mercantile Exchange at 4:14 p.m. New York time, according to data compiled by Bloomberg.
“From a supply side perspective there are some things to keep it propped up, but the demand is just not there,” Steve Mosby, vice president of supply consultant ADMO Energy LLC in Kansas City, Missouri, said in a telephone interview.
It’s the smallest premium since July 23, when BP Plc (BP/)’s Whiting refinery in Indiana, the largest in the Midwest, shut its coker following a fire. The gap rose to 20 cents a gallon on Aug. 2 and 3, which is tied with June 7 for the year-to-date high.
The unit started Aug. 9, and diesel’s premium in Chicago has fallen every day since Aug. 10.
“I’ve been loading diesel fast and furious the last two weeks, trying to get everything I own in a truck,” Mosby said.
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