ULSD NY Harbor Aug '26 (HOQ26)
| Barchart Symbol | HO |
| Exchange Symbol | HO |
| Contract | New York Harbor ULSD |
| Exchange | NYMEX |
| Tick Size | $0.0001 (0.01 cent) per gallon ($4.20 per contract) |
| Margin/Maintenance | $13,555/12,323 |
| Daily Limit | 15% above or below previous settlement |
| Contract Size | 42,000 gallons |
| Months | All Months |
| Trading Hours | 5:00p.m. - 4:00p.m. (Sun-Fri) (RTH 8:00a.m. - 1:30p.m.) (Settles 1:30p.m.) CST |
| Value of One Futures Unit | $42,000 |
| Value of One Options Unit | $42,000 |
| Last Trading Day | Trading terminates at the close of business on the last business day of the month preceding the delivery month |
Description
Heating oil is a heavy fuel oil that is refined from crude oil. Heating oil, also known as No. 2 fuel oil, accounts for about 25% of the yield from a barrel of crude oil. That is the second-largest "cut" after gasoline. The price consumers pay for home heating oil is generally comprised of 42% for crude oil, 12% for refining costs, and 46% for marketing and distribution costs (Source: EIA's Petroleum Marketing Monthly). Generally, a $1 increase in crude oil prices translates into a 2.5-cent-per-gallon rise in heating oil prices. Because of this, heating oil prices are highly correlated with crude oil prices, though they are also subject to swift supply-and-demand shifts driven by weather changes or refinery shutdowns.
Heating oil is used primarily for residential heating. In the US, approximately 8.1 million households use heating oil as their main heating fuel. Most heating oil demand occurs from October through March. The Northeast region, which includes New England and the Central Atlantic, is most reliant on heating oil. This region consumes approximately 70% of US heating oil. However, demand for heating oil has been declining as households switch to more convenient heating sources, such as natural gas. In fact, demand for heating oil is down by about 10 billion gallons/year from its peak use in 1976 (Source: American Petroleum Institute).
Refineries produce approximately 85% of US heating oil as part of the "distillate fuel oil" product family, which includes heating oil and diesel fuel. The remainder of US heating oil is imported from Canada, the Virgin Islands, and Venezuela.
Researchers at Purdue University developed a method to produce home heating oil from a blend of soybean oil and conventional fuel oil. The oil blend is made by replacing 20% of the fuel oil with soybean oil, potentially saving 1.3 billion gallons of fuel oil per year. This soybean heating oil can be used in conventional furnaces without altering existing equipment. Soybean heating oil is relatively easy to produce and emits no sulfur.
The "crack-spread" is the processing margin earned when refiners buy crude oil and refine it into heating oil and gasoline. The crack-spread ratio commonly used in the industry is the 3-2-1, which involves buying one heating oil contract and two gasoline futures contracts, and then selling three crude oil contracts. If the crack spread is positive, it is profitable for refiners to buy crude oil and refine it into products. The CME Group has a crack-spread calculator on their website at www.cmegroup.com.
Heating oil futures and options are traded at the CME Group. The CME's heating oil futures contract calls for the delivery of 1,000 barrels of fungible No. 2 heating oil in the New York Harbor. Futures are also traded on ICE Futures Europe and the Multi-Commodity Exchange of India (MCX).
Prices - CME heating oil futures prices (Barchart.com symbol HO) on the nearest-futures chart in 2025 closed down -8.4% at $2.1215 per gallon.
Supply - US production of distillate fuel oil in 2025 rose by +1.1% yr/yr to 4.987 million barrels per day, below the 2018 record high of 5.164. Stocks of distillate fuel oil in December 2024 were down by -0.1% yr/yr at 130.338 million barrels. US production of residual fuel in 2025 fell by -1.2% yr/yr to an average of 312,399 barrels per day. US stocks of residual fuel oil as of December 2025 were down by -2.8% to 22.097 million barrels, below the 2015 record high of 42.189 million barrels.
Demand - US distillate fuel oil usage in 2025 rose by +2.5% yr/yr to 3.886 million barrels per day, below the 2007 record high of 4.198 million barrels per day.
Trade - US imports of distillate fuel oil in 2025 rose by +7.3% to an average of 157,909 barrels per day, below the 2006 record high of 364,000 barrels per day. US imports of residual fuel oil in 2024 fell by 2.1% yr/yr to 107,751 barrels per day, far below the levels of over 1 million barrels per day seen back in the 1970s.
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