Heating Oil

Heating oil is a flammable liquid crude-oil by product, which is used for fueling building furnaces and boilers. It is generally used in residential complexes as a substitute for kerosene.

Types and Uses of Heating Oil

Heating oil is generally distributed in the following versions:

Heating oil #2: This is the cleanest form of heating oil, which also makes it the most expensive. It is capable of vaporizing at low temperatures. Heating oil #2 is most commonly used in residences.

 

Heating oil #4: This is a hybrid of heating old # 2 and #6. It is capable of combustion even in the absence of a heated storage system. Heating oil #4 is generally used in large power plants and commercial boilers.

 

Heating oil #6: This is the dirtiest version of heating oil, which makes it the cheapest. This oil is also known as residual oil and is chiefly used for creating asphalt.

 

Benefits of Heating Oil

Heating oil has the following advantages:

• Cost-effective: It is cheaper than other forms of energy, such as LPG and electricity. Heating oil is up to 5.5 times cheaper than electricity.
• Cleaner: It is a clean form of energy, since it can burn up to 400 degrees hotter than electricity and natural gas. Hence, it uses less fuel and heats faster.
• Safe: Unlike LPG and natural gas, heating oil is non-flammable at room temperature. This is because its flash point (lowest temperature at which it can burn) is about 140°F.
• Environmentally safe: It is non-toxic and biodegradable.

Factors Affecting Crude Oil Prices

Heating oil prices are influenced by different factors, including:

• Season: The demand for heating oil is higher in colder seasons. This results in higher prices during the winter months.
• Crude oil prices: Any fluctuation in the prices of crude oil invariably affects the prices of heating oil. This is because heating oil is a by-product of crude oil.
• Local competition: Heating oil prices are generally low in regions that have a large number of dealers. This is because the dealers lower prices to acquire a larger market share.
• Distribution costs: Heating oil prices are higher in remote regions due to inefficient and costlier distribution channels.

Heating oil comprises approximately 25% of the total yield of crude oil barrel. This constitutes the second largest share of crude oil products, after gasoline.