Heating Oil Future Price

Written by Tara Peris
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Heating oil future prices are likely to remain heavily influenced by broader market fluctuations. There are a number of things that contribute to the cost of heating oil at a given point in time, including marketing and retailer or distributor costs. However, to understand the price changes most clearly, it helps to have an understanding of the major market influences.

One of the biggest influences on heating oil price is simply the season of the year. As heating oil is a primary source of fuel for America's homes, especially those in the north, it is in high demand during cold winter months. All other things being equal, this increased need causes prices to soar.

Heating Oil Future Prices in Relation to Crude Oil

Because heating oil is a distillate fuel oil that comes from crude oil, it is subject to influences in the crude oil market. Indeed, crude oil accounts for approximately 40% of the price of heating oil, meaning that worldwide demand for oil, coupled with OPEC prices and other factors, exerts a significant influence on what one pays.

Finally, heating oil future prices are likely to be influenced by competition with the local marketplace, and by the costs of operating within specific regions. Depending on the area in which you live and the degree of competition, you are likely to observe quite a bit of variability. Together, these numerous contributing factors make it increasingly difficult to predict heating oil future prices.


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