Page 53 - MEX-Yearbook-2017

Fundamental Facts
• Heating oil trading is a very seasonal affair, with demand being its

highest just before the winter months. Heating oil prices obviously
increase in these times accordingly. Mild winters can, however, lower
the perceived demand for heating oil and thus the price of heating oil
options will decrease as well.
• The heating oil market is also intrinsically linked with the crude oil
market, as heating oil is a direct by-product of crude oil. This can mean
that as oil prices increase, so does the heating oil price.
• Furthermore, as there have been no new oil refineries built in the US for
the last 3 decades, only so much heating oil can be produced each year,
and this amount will decrease as refineries shift their attentions to the
increased demand for gasoline.
• Also, if new methods are found to heat the homes that have the greatest
need for heating oil, then the price of heating oil futures will drop
considerably.

Heating Oil

50 January
February
L 40
March
O 30 April
May
T 20 June
July
10 August
September
S October
November
0 December

Months (January 2017 - December 2017)

MEX NEPAL YEAR BOOK 2017 | 52