Houston (Platts)--11Feb2013/538 pm EST/2238 GMT

US Gulf Coast ultra low sulfur diesel rose to its highest outright price in four months Monday on increased demand and less refiner selling.

On deadline day for a Colonial Pipeline shipping cycle, Platts assessed Gulf Coast ULSD at NYMEX March heating oil futures plus 5.10 cents/gal, up 2.70 cents/gal from Friday's assessment.

The outright price of $3.28560/gal is the highest ULSD has been since October 11, when the outright price was $3.29340/gal. The March NYMEX heating oil contract was assessed at 3:15 p.m. EST Monday at $3.2346/gal, down almost 1 cent/gal from Friday.

"Looks like some guys were short," a trader said.

Changes in ULSD differentials of more than about 2 cents are unusual in the highly liquid Gulf Coast market. Traders offered a number of reasons for Monday's move, with one citing aggressive bidding and not enough refiner selling to satisfy it. "Nobody had the bullets to slow it down," the trader said.

Another trader said export demand was strong Monday, while a third said that if the rise was export-related, it was not for European destinations because that arbitrage is "dead shut."

Potential refinery issues also may have played a role, market sources said, with one citing "unconfirmed upsets."

One known upset involved a sulfur recovery unit tripping offline Monday at Valero's 290,000 b/d refinery in Port Arthur, Texas, according to a Texas Commission on Environmental Quality filing and company spokesman Bill Day.

Day said there was no material impact to production from that event, however.

--David Henry, david_henry@platts.com --Edited by Lisa Miller, lisa_miller@platts.com