NYMEX heating oil price

What "NYMEX heating oil" really is now

The contract was renamed NY Harbor ULSD in May 2013 when sulfur specs changed (Ultra Low Sulfur Diesel, 15 ppm). The name "NYMEX heating oil" persists in trade press. Same contract, same delivery point (NY Harbor), same 42,000-gallon size. Today's settle is the wholesale anchor that retail dealers reference for next week's posted board rate. CME

How to read the curve as a homeowner

• Backwardation. Front-month above back-month. Market expects supply tightness now, easing later. Translates to: pre-buy cap is cheap, will-call risk is higher.
• Contango. Front-month below back-month. Storage is being paid for. Translates to: pre-buy fixed is fairly priced, cap fee is rich.

Wholesale-to-retail pass-through

A $0.10/gal move in HO front-month maps to roughly $0.07/gal at retail within 30 days, holding crack spread and dealer margin constant. A $0.50/gal sustained move maps to $0.35 retail. This is the rule the crude shock scenario uses.

Cross-references

• Wholesale vs retail spread
• Heating oil vs crude oil
• Crude shock scenario