While West Texas Intermediate crude oil is the primary ingredient in gasoline refining, the slightly heavier Brent crude oil with a higher sulfur content is the ingredient in distillate processing. ICE Brent crude oil for November delivery was trading at around a $3.83 per barrel premium over the NYMEX WTI November crude oil futures on September 6.
Meanwhile, the continuous heating oil futures contract plunged around 60% from an all-time peak in April 2022, reaching bottom in May 2023 at $2.15 per gallon wholesale. The price has recovered to over $3 per gallon in early September; the factors that pushed prices to record highs in 2022 remain intact. The potential for an explosive rally in heating oil is a clear and present danger as the oil market heads into the fall and winter.
