HOGOs refers to the arbitrage trading strategy between heating oil and gas oil markets, exploiting price differences between these similar distillate products traded in different geographic markets. This cross-market arbitrage capitalizes on temporary pricing inefficiencies between U.S. heating oil (traded on NYMEX) and European gas oil (traded on ICE).

HOGO arbitrage requires understanding specifications differences, transportation costs, seasonal demand patterns, and regulatory variations between markets. Successful HOGO trading demands expertise in both Atlantic Basin energy markets and the logistics of moving refined products between regions. These opportunities arise from supply disruptions, demand shifts, or temporary market dislocations.

Real-world example: A trader profits from HOGO arbitrage by selling expensive U.S. heating oil at $2.50 per gallon and buying cheaper European gas oil at $2.30 per gallon equivalent, capturing the spread while managing cross-market basis risk.