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 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: