Gas Oil Trading (GAS)

Gas oil is a product of crude oil and is used for heating purposes and for generating power. Therefore, it is also called heating oil in the US. Gas oil accounts for about 25% of the yield from a barrel of crude oil. This represents the second largest "cut" after petrol.

Gas Oil Trade

Gas oil is traded widely in Europe as a hedging tool for the physical industry. Traders can conduct trade in gas oil via futures, options, crack spread options or average price options contracts. The availability of several trading contracts offers traders improved flexibility in managing their price risks. Trading for gas oil futures contracts is conducted on the Intercontinental Exchange (ICE) and New York Mercantile Exchange (NYMEX).
Gas oil options and futures are used by:

• companies to hedge against diesel and jet fuel costs. Both diesel and jet fuels trade in the cash market at a premium to NYMEX Division New York Harbor gas oil futures
• traders to capture profit-making opportunities.

The underlying physical asset for gas oil futures contracts, as offered on the ICE exchange, is gas oil barges delivered in ARA (Antwerp, Rotterdam and Amsterdam). Gas oil futures contracts are used as the pricing reference for all distillate trading across Europe and other countries.