US Cash Products-Gulf gasoline sharply gains on short covering

* Gulf gasoline jumps on short covering ahead of pipeline scheduling * Chicago gasoline up on refinery unit outages * Harbor F2 RBOB up as summer-grade trade winds down HOUSTON, Sept 10 (Reuters) - U.S. Gulf Coast gasoline differentials rosesharply on Tuesday as traders rushed to cover short positions with few barrelson offer, traders said. Chicago gasoline also rose, then later fell back a bit, on refinery unitoutages, including a reformer and oil blending unit shut for planned work at BPPlc's 405,000 barrels-per-day (bpd) refinery in Whiting, Indiana, thelargest in the U.S. Midwest, traders said. In the Gulf market, conventional M3 gasoline differentials shot up by 6.00cents per gallon to 13.00 cents under October RBOB futures on the New YorkMercantile Exchange while A2 CBOB gained 4.50 cents per gallon to 17.50 centsunder, traders said. Such moves in the liquid, well-supplied market are fairly rare, but tradersattributed it to short covering as the latest five-day lifting cycles of bothgrades scheduled to move on the Colonial Pipeline on Tuesday. "Not many barrels on offer today," a Gulf trader said. Total also reported on Monday that a power failure affectedmultiple sulfur recovery units at its 225,000 bpd refinery in Port Arthur,Texas, which traders said could have been a factor in the boost. In Chicago, CBOB gasoline differentials climbed by 3.50 cents per gallon toa wide bid-offer spread of 6.00/9.00 cents over October RBOB futures early onTuesday on the BP Whiting unit outage and a vacuum distillation unit outage atFlint Hills Resources' 320,000 bpd St. Paul-area refinery in Pine Bend,Minnesota. Energy intelligence firm Genscape reported the Pine Bend outage onSunday. Chicago gasoline later partially retreated to 5.00/7.00 cents over, up by2.00 cents per gallon from Monday's finish. Midwest traders also said they were beginning to see V-grade gasoline showup in bidding in the Group Three market. Next week V-grade is slated to becomethe main grade traded in the market. V-grade, unlike N-grade, is usually blended with 10 percent ethanol to raisethe octane to 87 from 84. The switch to V-grade helps satisfy customer needs tocomply with Renewable Fuels Standard (RFS) requirements. A similar move happened in the Gulf market last year when A-grade,formulated for blending with 10 percent ethanol, became more in-demand thanconventional M-grade. A Midwest trader said he saw a bid for V-grade at a penny over October RBOBfutures for Sept. 20 delivery. In the New York Harbor, F2 RBOB gasoline differentials were offered at 2.00cents per gallon higher at 17.00 cents over October RBOB futures ahead of nextweek's transition to F4 winter grade as sellers offering the F2 summer grade F2dwindles. F4 RBOB winter grade was weaker than the summer grade, heard bid at 1.40 cents a gallon under October RBOB futures for mid-September delivery,traders said. Prompt jet fuel had bids seen at 6.75 cents under the futures benchmark,with offers talked at 6.50 cents under, down from 6.00 cents under on Monday. Renewable identification number (RIN) credits for ethanol were flat. EthanolRINs for the 2013 compliance year traded at 69.5 cents and 69 cents, and werelast heard talked at 69 cents, down 0.50 cent from Monday afternoon, a tradersaid. For more refinery news, please go to Latest day Timing NYMEX Bid Offer Change Contract U.S. GULF COAST <0#P-USG> * Scheduling A3 CBOB gasoline * Cycle 51 RBOB -17.75 -17.25 4.50 M3 conventional gasoline * Cycle 51 RBOB -13.25 -12.75 6.00 62-grade ULSD Cycle 52 HO -3.75 -3.25 0.50 54-grade jet fuel Cycle 52 HO -13.50 -12.50 -1.50 Heating oil * Cycle 52 HO -16.50 -16.00 0.00 NEW YORK HARBOR <0#P-NYH> M2 conventional gasoline Prompt RBOB 6.50 7.00 0.00 Any-Month RBOB 7.75 8.25 0.00 F2 RBOB Prompt RBOB 16.75 17.25 2.00 Any-Month RBOB 14.75 15.25 0.00 ULSD Prompt HO 0.00 0.25 0.00 Any-Month HO -0.50 0.00 0.00 Heating oil Prompt HO -10.75 -10.25 0.00 Any-Month HO -11.40 -10.90 0.00 Jet fuel Prompt HO -6.75 -6.50 -0.75 Any-Month HO -2.00 -1.50 0.00 MIDWEST <0#P-G3> <0#P-MC> Chicago CBOB gasoline Cycle 2 RBOB 5.00 7.00 2.00 Chicago ULSD Cycle 2 HO -1.50 -1.00 0.25 Group Three gasoline RBOB 10.00 11.00 -0.50 Group Three ULSD HO 2.50 3.00 0.75 (Reporting by Kristen Hays in Houston and Robert Gibbons and Cezary Podkul inNew York; Editing by Marguerita Choy)