The name is a historical relic. The contract's specification is ULSD, and its main economic role is as the pricing and hedging instrument for diesel and, via cross-hedge, jet fuel. Trucking, rail, shipping and aviation all price off it.
Distillate demand is less seasonal than gasoline but more exposed to industrial activity, which is why the diesel crack is watched as a real-economy indicator. European gasoil serves the same function and the two trade against each other.
Example: ULSD at $2.60 a gallon is $109,200 per contract and, at 42 gallons per barrel, $109.20 a barrel. Against crude at $78.00 the distillate crack is $31.20, a historically fat margin that signals tight refining capacity.
Related: crack-spread, gasoil, rbob-gasoline, cross-hedge, long-hedge