Heating Oil, Uses, Characteristics, History
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Heating Oil Home » Heating Oil
History

The history of oil is a long one, involving many important discoveries and much technological innovation. It was evolved from 3000 BC to 17th century. As heating oil is derived from crude oil, its price shows a high correlation with crude oil prices.

Characteristics

Residential heating oil, also known as number 2 fuel oil, is a close relative of kerosene and jet fuel, as it is also a middle distillate. The heating oil stock that is refined has a higher propensity to have much lower sulfur content from one tank to the next

Uses

Heating oil and Diesel are classified as distillate fuel oils and rank second behind gasoline as the most-consumed liquid fuels. While, diesel powers heavy construction equipment, trucks, buses, tractors, trains and automobiles, heating oil (often referred to as No. 2 fuel oil in US) is used in the central heating of homes and small buildings.

Influencing Factors

The price of heating oil is influenced by many factors
  • Seasonal demand (prices rise as more consumers use oil to heat their homes in cold winter months),
  • Modifications in the cost of crude oil, competition among local heating oil dealers, and regional operating costs.
  • Wood furnaces, corn pellets and biodiesel from vegetable oil are all being sought after as alternative fuel sources.
Exporters and Importers

Mainly, Russia, Saudi Arabia, United States, Iran, China, Mexico, Canada UAE and Iraq are producer of the heating oil and The consuming countries are North America, China, Western Europe, Japan and Latin America

Why trade heating oil through NDEX:

Contract size: Regular
Low transaction cost: Fixed spread of NPR 0.2 Per 1 US GALLON
Generous leverage: On all products that are clearly detailed on the trade.
Initial margin: Rs.75000 (Regular)
Hedging capability: Can take long or short position from same account
Months: All months
Season: Oct to March

Trading time:

Daily Open Time 3:45:00 AM
Daily Close Time 2:59:59 AM

Conclusion

The price of heating oil is dependent on three factors: weather; the distribution of natural gas; and refinery capacity. Traders who are overly dependent on technical analysis can end up missing some of the subtle signals that any of these three factors may bestow on heating oil price fluctuations.
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