NEW YORK, June 29 (Reuters) - The spread between U.S.
distillate futures and ICE gasoil futures widened to its largest
since March 2015, supported by the unseasonable strength in
diesel demand and expectations for supply tightness in U.S.
biofuels compliance credits.
* The spread HO-LGO1=R touched a high of $0.0946 on
Wednesday, highest since March 4, 2015 when it hit a high of
$0.0954.
* Traders cited worries of tightening supply of U.S.
biofuels compliance credits as also affecting the spread on
Wednesday.
* The credits are used by oil refiners and importers to
prove they are complying with government mandates for biofuels
use.
* "There's lots of demand (for diesel) coming from Latam and
the Caribbean....so would say that's probably impacting it," one
trader said.
* Diesel demand in the U.S. and overseas has risen lately,
after a mild winter sapped demand for heating oil and punished
margins as products went straight into bulging storage tanks.
* On the other hand, there could also be some pressure on
gasoil, traders said.
* "I'm sure that there are some imports to EU region (Med
and/or NWE) from India (and others) that could be pressuring
gasoil," one trader said.