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Heating oil

MyWikiBiz, Author Your Legacy — Tuesday March 16, 2010

A tanker truck refilling a residential heating oil customer's home

Heating oil is used to fuel furnaces within buildings. Typically, delivery is by tanker truck to individual homes and commercial spaces, and the oil is stored in oil tanks in the basement or outside, next to the building. Leaks in older facilities are an environmental concern because even a small leak can cause significant groundwater pollution, rendering the water from wells and springs unusable because chemicals from the oil are harmful to both humans and animals. Heating oil is usually dyed to distinguish it from taxed vehicle fuel (as using untaxed fuels with dye, or mixtures of such, is illegal and, since such fuels are not intended for internal combustion engines, can damage the environment).

Heating oil, also known as No. 2 fuel oil, accounts for about 25% of the yield of a barrel of crude oil, the second-largest "cut" after gasoline. ^[1]

1 Market info
2 References
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3 See also

Market info

Among distillate fuels, the trend in recent years has seen the proportional demand for heating oil decreasing, as usage of liquified petroleum gas (LPG) has increased. ^[2]

Heating oil futures contracts trade in units of 42,000 gallons, which is the equivalent of 1,000 barrels. Prices are based on delivery in New York City harbor, the principal cash market trading center. The heating oil futures contract is also used to hedge diesel fuel and jet fuel, both of which trade in the cash market at an often stable premium to heating oil futures.

Businesses operating in the heating oil sector will identify themselves by the following 5-digit NAICS codes: