Oil futures – Heating Oil
Heating oil (HEO) is the US term for gas oil. Heating oil is produced by refining crude oil. The refining of crude yields 50% gasoline and 25% heating oil. Heating oil is used mainly to heat homes in Northeast America. The US produces about 85% of its heating oil and imports the rest from Venezuela, Canada and the Virgin Islands. The cost of oil generally increases in winter to ensure the supply needed to meet the seasonal demand for heating oil.
Heating oil price
The price of heating oil typically tracks the crude oil price. The price a refiner pays for crude oil directly influences the cost of heating oil to consumers wanting to heat their homes. The US Distillate Fuel Report provides weekly information on the crude oil price and the heating oil price.
Heating oil futures
If you deal in heating oil futures, you should watch NE American weather reports during the northern hemisphere winter months (especially from December to February). Unexpectedly cold weather conditions can cause a rally in the price of heating oil futures. This is because demand for heating oil is boosted.
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