We have seen some analysts over the last week recommend getting 2023 energy entirely booked or at least half. Attached is a Jan 2023 Ultra Low Sulfur Diesel (ULSD) Heating Oil Chart. I am not sure if the physical has come down as quickly as the futures (although we have had a small rally past couple days), so it will be worth checking with your energy suppliers since there is a 34cts discount from JAN to JUL futures. We usually have carry in energy markets so buying deferred cash always looks more expensive relative to the spot. Cash prices should be lower in the spring, but at least should be flat across forward delivery? The seasonal chart is attached at the bottom. Prices tend to move higher into May.
We can also buy energy futures in your RJO acct, although depending on the size of your operation the contracts are large and might not be a great fit. Ultra Low Sulfur Diesel (ULSD) Heating Oil is 42,000 gallons. There are mini-contracts of 21,000 gallons and micro-contracts of 4,200 gallons (volume and open interest is very low).
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