ULSD / Diesel Fuel Long

NYMEX:HO1!   NY Harbor ULSD Futures
This analysis is contingent on data that cannot be cited due to the source's explicit restrictions placed on republishing without expressed written consent.

ULSD is of particular interest in the energy markets for the following reasons:

• It is quoted based on delivery at New York Harbor. This means that it has localized supply / demand factors related to the Eastern United states. Data shows supply is particularly tight at this location.

• Traders are exporting virtually all US oil overseas due to the spread between WTI and Brent

• No tankers set to deliver low sulfur distillates to New York Harbor for over a month.

On top of these factor, there's a clear support zone at the current price. Given that simple technicals are lining up with fundamentals, the trade seems favorable. Major risk factors include OPEC+ meeting, however I speculate that OPEC will not increase supply due to negative data regarding oil consumption.

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