In a U.S. Senate Energy & Natural Resources Committee hearing on diesel prices Sept. 23, U.S. Energy Information Administration (EIA) cited recent data showing that U.S. ultra-low sulfur diesel (ULSD) is typically trading in futures markets at about a 13-14 cents/gallon premium to relatively higher-sulfur No.2 heating oil (gasoil).

Wall Street debt rater Fitch notes that record U.S. distillate exports this year have helped U.S. refiners overcome an otherwise miserable year for gasoline margins and demand.

In a new report, “What’s Behind Distillates’ Recent Outperformance,” Fitch notes that gasoline demand destruction in North America is having a much bigger impact on refiners than demand destruction in U.S. distillates.

Oil markets in most of the world continue to show weakness, despite several U.S. Gulf Coast refineries still hampered by the effects of Hurricanes Gustav and Ike.

Crude oil futures last week fell below $106/barrel on indications of slowing oil demand, although crude had risen earlier in the week as investors flocked to commodities to escape volatility in stocks, thanks to the U.S. financial crisis.

Russia’s Energy Ministry has proposed that Euro-3, 4 and 5 fuels desulfurization deadlines be postponed for another year, according to a report from Skrin news service.

The U.S. Senate last week passed overwhelmingly an energy tax bill that includes clean-coal, biodiesel, gasification, electric-car and “renewables” tax breaks.

However, many members of the U.S. House objected to the Senate provisions. Whether the House and Senate can resolve bill differences prior to taking recess for the upcoming November elections remains in question.

After losing a São Paulo State Court battle over diesel desulfurization deadlines, Petrobras has now agreed to supply 50-ppm sulfur diesel fuel in 2009.