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:
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.