Heating Oil Commodity Overview

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Heating Oil Commodity Overview
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• A heating oil future is a standardized contract,
  traded on an exchange, where the contract buyer
  agrees to take delivery of a specific amount of
  heating oil on a predetermined date at a
  locked-in price. The seller agrees to make such a
  delivery adhering to the same contract
  specifications. Heating oil prices are often
  directly associated with WTI crude, and hence are
  open to fluctuations, which is why traders have
  come to view heating oil futures as an attractive
  opportunity to manage risk and make profits.
  Heating oil commodity is a low-viscosity
  petroleum product that is derived from crude oil.
  As a result, heating oil prices are often tied to
  WTI crude. Generally, 25 of the yield of a
  barrel of crude is devoted to heating oil, the
  second most after gasoline.

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• Heating oil commodity is in refineries heat the
  crude oil at temperatures of several hundred
  degrees and put the boiling liquid into
  distillation columns called stills. The boiling
  process produces heating oil as well as other
  fractions such as kerosene, gasoline and butane.
  Each of these products is recovered at different
  temperature points in the boiling process.
  Distillates including heating oil and diesel
  generally get recovered at temperatures between
  450 to 650 degrees Fahrenheit.
• Its primarily used as a fuel for furnaces and
  boilers to heat homes and other buildings. Much
  of the demand for heating oil occurs between
  October and March each year, especially in cold
  markets. Refineries produce heating oil in the
  distillate fuel category, which also includes
  diesel fuel refineries support most of the demand
  for distillates however, imports typically
  supplement supplies during the winter months for
  consumers in the Northeast. Heating oil (and
  diesel) are moved throughout the pipelines,
  tankers, barges, trains and trucks.

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• In the view of many analysts, growing demand for
  crude combined with strains on refining capacity
  could drive heating oil prices higher. Janet
  Kong, a senior executive with multinational oil
  company, BP, believes that demand for distillates
  such as heating oil is driving higher global
  demand for crude oil.
• Since heating oil is a byproduct of crude, WTI
  crude oil prices affect heating oil prices. Other
  price drivers include

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• cold weather (cold weather can trigger a spike
  in demand and therefore prices)
• refining costs
• the price of alternative heating fuels
• improvements in building energy efficiency and
  insulation
• government regulations

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Contact us

• Flannet Lux International
• Street Av. 27 De Febrero 674 Edif. El Salvador
  Suite 3
• Locations Santo Domingo, D.N. Dominican Republic
  10700
• Phone No 1 [phone]
• Website www.flannetlux.com
• Business Email info_at_flannetlux.com