- Daily Energy Market Update
- Posts
- Special Report: HO WTI Crack Spread
July 9,2025
Overview
The HO/ULSD vs WTI/CL crack has retreated today by $1.25. We suspect that this is due possibly to the belief that refiners have ramped up their distillate output given the strong margin that exists, such that supply will become more plentiful. This week's DOE data showed a drop in Distillate demand of 375 MBPD, bringing the total back below 4 MMBPD.
The HO/CL crack is under pressure today even as news wires point out that distillate stocks are at their lowest seasonal level since 1996 and lowest total since April 2005, as per today's DOE data.
We also suspect some profittaking in HO/ULSD may be happening. One week ago, Bloomberg reported that the ULSD net-long position was the most bullish in more than 18 months.
The ULSD/CL crack has risen lately to its best value since March of 2024. Technically though the crack has several highs of late over $34, which look to have formed resistance. The highs from the past 2 weeks lie between $34.08 and $34.19. Momentum looks to have turned downward for the crack basis the DC chart. If the crack were to rise over the recent highs above $34, we see next resistance near $35.65 from weekly data going back to June of 2023.
Support for HO/ULSD versus WTI/CL is seen at $32.25 and then at $30.50.
Enjoyed this article?
Subscribe to never miss an issue. Daily updates provide a comprehensive analysis of both the fundamentals and technical factors driving energy markets.
Click below to view our other newsletters on our website:
Disclaimer
This article and its contents are provided for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any commodity, futures contract, option contract, or other transaction. Although any statements of fact have been obtained from and are based on sources that the Firm believes to be reliable, we do not guarantee their accuracy, and any such information may be incomplete or condensed.
Commodity trading involves risks, and you should fully understand those risks prior to trading. Liquidity Energy LLC and its affiliates assume no liability for the use of any information contained herein. Neither the information nor any opinion expressed shall be construed as an offer to buy or sell any futures or options on futures contracts. Information contained herein was obtained from sources believed to be reliable, but is not guaranteed as to its accuracy. Any opinions expressed herein are subject to change without notice, are that of the individual, and not necessarily the opinion of Liquidity Energy LLC
Reply