- Ticker Symbol: HO
- Exchange: NYMEX
- Trading Hours: 9:00 AM until 2:30 PM EST.
- Contract Size: 42,000 U.S. gallons (1,000 barrels)
- Contract Months: all months(Jan. - Dec.)
- Price Quote: U.S. dollars and cents per gallon. Ex $2.15 per gallon
- Tick Size: $0.0001 (0.01¢) per gallon ($4.20 per contract).
- Last Trading Day: close of business on the last business day of the month preceding the delivery month.
Heating oil is also called a distillate or Number 2 oil.
When crude oil is refined, about 25 percent of the oil becomes heating oil and about 50 percent becomes gasoline. Heating oil is primarily used to heat homes in the Northeast.
The United States produces about 85 percent of its heating oil, while the remainder is imported from Canada, the Virgin Islands and Venezuela.
Oil companies begin to ramp up production of heating oil before the winter season begins to ensure ample supplies of heating oil to meet the winter demand.
The main report for heating oil is the EIA Weekly Energy Stocks report.
Weather during the winter months of December, January and February are critical to watch. The weather in the Northeast is the place to focus.
- The biggest opportunities for a quick rise in price occurs during the winter months. Unexpected or prolonged periods of extreme cold in the Northeast will typically cause sharp rallies in the price of heating oil futures.
Simply buying heating oil futures in the winter is not a "no-brainer" trade. It gets cold every winter; the catch is that the weather has to be colder than expected and more heating oil needs to be consumed than anticipated for the season. - Be alert to brokerage firms that try to sell you on far out of the money call options as a sure bet.
- Heating Oil prices typically follow crude oil.
