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 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 trading 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.
Gas oil prices typically move in sync with that of crude oil.
Specifications for trading Gas Oil on the easy-forex® platform.
easy-forex® Symbol for Gas Oil: GAS
Quote convention: USD per metric ton, e.g. GAS/USD = 540.00 USD per metric ton.
Expiration date: All GAS deals will expire at 10:00 GMT two business days prior to the 14th calendar day of the relevant futures delivery month. easyMarkets® does not rollover expiring deals to the new contract, unless notified beforehand. The client should directly contact easyMarkets one working day before expiry of deal for renewal. Client should note that in the case of renewals, easyMarkets® will not carry the profit or loss to the new deal. easyMarkets also reserves the right not to renew the deal if it so chooses.
If instructed to, as soon as the old deal is automatically closed, a dealer will open a new deal expiring in the new month that follows the expired deal with the same amount and type of the closed deal. The remaining margin on the expired deal will be placed on the new one, unless the client instructs the dealer otherwise. The opening rate of the new deal will be done at the new month’s rate.
Using an OIL/USD deal as an example: at expiry time 12:00 GMT the old contract closing price was at USD35.50 per barrel and the new contract price is trading at $40.50. At expiry, the old deal will be closed automatically at $35.50. Any profit or loss will be reflected in the margin and thus in the free balance. If instructed, the dealer will open a new deal at a price of $40.50 (the price of the new contract at 12:00 GMT), and place an amount equal to the remaining margin on the old deal, unless instructed otherwise.
In order to inquire about expiry date of current contract and difference in prices between the two contracts, please contact your dealer.
Trading hours: Trading is conducted 0:00 until 22:00 GMT, Monday to Friday. Outside these hours no opening or closing of deals will be allowed.
Read more about oil trading.