 Why are oil prices higher than they were a few years ago?
The United States sources of heating oil are domestic refineries and imports from foreign countries. Refineries produce heating oil as a part of the "distillate fuel oil" product family, which includes both diesel fuel and heating oil. Distillate products are shipped throughout the United States by pipelines, barges, tankers, trucks and rail cars. Most imports of distillate come from Canada, the Virgin Islands and Venezuela.
Heating oil is traded on the commodities market just like other home heating fuels. This means heating oil cost is subject to fluctuations, just like the stock market. The price of crude oil has the biggest impact on the price of wholesale heating oil. Due to the variations in crude oil prices, dealers are generally price takers on any given day.
Heating oil like any energy product responds to supply and demand fundamentals, such as cold or warm weather. Additionally, heating oil prices in this country may be affected by a supply disruption in oil producing country, or even cold weather in Europe. On a daily basis, heating oil prices can vary widely.
Click here to return to the list of Frequently Asked Questions.
|
|
|
