How do commercial businesses hedge ulsd diesel / heating oil price risk?

Commercial businesses hedge ulsd diesel / heating oil exposure using NYMEX-traded futures, options, and swaps referenced to the HO benchmark contract. The essential fuel contract for commercial transportation, logistics, agriculture, and heating.

What is the contract size for ULSD Diesel / Heating Oil futures (HO)?

The NYMEX HO contract size is 42,000 gallons (1,000 barrels), quoted in U.S. Dollars & Cents per gallon, with a tick value of $4.20 per $0.0001/gallon per contract.

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Exchange Benchmark Coverage

ULSD Diesel / Heating Oil

Primary ExchangeNYMEX

The essential fuel contract for commercial transportation, logistics, agriculture, and heating.

Contract Size & Unit42,000 gallons (1,000 barrels)

Benchmark SymbolHO

Primary Price Volatility Drivers

•Distillate inventory levels (EIA Weekly Data)
•Winter heating demand in Northeast US
•Freight shipping volumes
•Refinery diesel yield margins

Commercial Risk Hedging Tools

✓Fleet Call Options to set maximum fuel price caps
✓Heating Oil Swaps for fixed budget fuel locks
✓Jobber rack margin hedges

Physical Basis Dynamics & Location Differentials

Local rack diesel prices differ from NYMEX HO benchmark due to local terminal supply, pipeline tariffs, and state fuel taxes.

Advisory Engagement

Manage ULSD Diesel / Heating Oil Volatility

Request a market-specific position review to evaluate basis risk, option collar boundaries, or swap pricing.