1. Introduction to Commodities
  2. Commodities: Cocoa
  3. Commodities: Coffee
  4. Commodities: Copper
  5. Commodities: Corn
  6. Commodities: Cotton
  7. Commodities: Crude Oil
  8. Commodities: Feeder Cattle
  9. Commodities: Gold
  10. Commodities: Heating Oil
  11. Commodities: Live Cattle
  12. Commodities: Lumber
  13. Commodities: Natural Gas
  14. Commodities: Oats
  15. Commodities: Orange Juice
  16. Commodities: Platinum
  17. Commodities: Rough Rice
  18. Commodities: Silver
  19. Commodities: Soybeans and Soybean Oil
  20. Commodities: Sugar
  21. Commodities: Wheat
  22. Understanding Commodities Trading

Heating oil is a low-viscosity refined byproduct of crude oil (as such, the price of heating oil is directly tied to WTI crude oil prices). It’s 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 like the northeastern states in the U.S.

Contract Specifications

Ticker Symbol

HO (CME Globex)

Contract Size

42,000 gallons

Contract Months

All months: F, G, H, J, K, M, N, Q, U, V, X, Z

Trading Hours

CME Globex: Sunday – Friday, 6:00 p.m. – 5:00 p.m. (there’s an hour break from 5:00 to 6:00 p.m. each day)

Last Trading Day

The last business day of the month preceding the delivery month

Price Quote

U.S. dollars and cents per barrel

Tick Size

$0.0001 per gallon ($4.20 per contract)

Production        

Refineries produce heating oil in the distillate fuel category, which also includes diesel fuel. U.S. refineries support most of the U.S. 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 U.S. via pipelines, tankers, barges, trains and trucks.

Price Drivers

Since heating oil is a byproduct of crude, WTI crude oil prices affect heating oil prices. Other price drivers include:

  • 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

 

 


Commodities: Live Cattle
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