Heating Oil - Commodities

Introduction

Heating oil is a major trading type of sweet light crude oil that serves as a major benchmark price for purchases of oil around the world. This grade of oil is described as 'light' because of its low density, and sweet because of its low sulfur content.

Characteristics

Heating oil is a light crude oil (LCO), but heavier than West Texas Intermediate (WTI). It contains approximately 0.4% sulphur, which classifies it as sweet crude, yet not as sweet as WTI. Heating oil is suitable for production of petrol and middle distillates. It is typically refined in Northwest Europe.

History

More than four thousand years ago, asphault was employed in the construction of the walls and towers of Babylon; there were oil pits near Ardericca (near Babylon), and a pitch spring on Zacynthus (Greece).

Utilities

Heating oil has a wide range of applications, such energy production. heating oil is used in the production of petrol, less so than Brent Crude Oil.

Markets

Heating oil  was originally traded on the open outcry International Petroleum Exchange in London, but has been traded on the Electronic Intercontinental Exchange, or ICE since 2005.