Heating Oil

Heating oil, or oil heat, is a low viscosity, flammable liquid petroleum product used as a fuel for furnaces or boilers in buildings.

Heating oil is commonly delivered by tank truck to residential, commercial and municipal buildings and stored in above-ground storage tanks ("ASTs") located in the basements, garages, or outside adjacent to the building.

Heating oil accounts for about 25% of the yield of a barrel of crude oil, the second largest "cut" after gasoline (petrol). Options on futures, calendar spread options contracts, crack spread options contracts, and average price options contracts give market participants even greater flexibility in managing price risk.

Heating oil futures are traded on the Intercontinental Exchange (ICE) and NYMEX. These contracts have delivery dates in all 12 months of the year and are used to hedge diesel fuel and jet fuel.