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related
also:
 Heating
Oil
Futures Market Facts
The exchange
for trading heating oil futures is
on NYMEX - New York Mercantile Exchange, (NYMEX symbol OH).
Futures contracts on heating oil are energy contracts
that are legally binding instruments to accept delivery in the
New
York
harbor - however traders might liquidate or change position
on the contract prior to delivery.
Heating oil, referred to as No.2 heating oil (or "oil heat") has
its demand primarily in the fueling of furnaces and boilers.
It represents the lower BTU cost alternative to propane while
servicing areas inaccessible to natural gas. Tank truck delivered,
the fuel oil
offers logistical versatility. However it is not considered
a "clean burning" fuel. Though it has been a popular
choice for the heating of residential, commercial, industrial
and municipal
buildings where being stored in above ground tanks. Recent competing
fuels for the residential market now include biofuels, and pellet
stoves.
Heating oil, since it comes from crude, is influenced by the price
of crude. Thus many reports tie the price to OPEC announcements
along with weather conditions and current supply levels. Geographic
location also plays in the mix.
The value of currency affects fuel oil as well. Even
when supply levels are substantial, price can rise dramatically
in light of a week dollar. A case that was evident in the northeast
U.S. during early winter, 2010, in conjunction with a strong oil
demand.
Prices and futures in 2011 will much depend on
the price of crude, factoring crude consumption and production
output levels.
For increased
risk flexibility, heating oil traders who are so inclined have
average price option contracts at their disposal,
in addition to the calendar, and crack spread options.
Options may also be used exclusive of any futures.
Get information on energy
markets with our Crude
Oil Futures Markets, including Light
Sweet Crude and Sweet
Crude and
gas resource for Trading
Natural Gas Futures Market in addition to Heating
Oil Futures details.
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