What are Heating Oil Futures?
Heating oil futures are heavily traded in the U.S. and around the world, giving heating oil producers and consumers a valuable financial product to protect themselves against the risk of price fluctuations in the heating oil market.
A heating oil future is a standardized contract, traded on an exchange, where the contract buyer agrees to take delivery of a specific amount of heating oil on a predetermined date at a locked-in price. The seller agrees to make such a delivery adhering to the same contract specifications.
Heating oil prices are often directly associated with WTI crude, and hence are open to fluctuations, which is why traders have come to view heating oil futures as an attractive opportunity to manage risk and make profits.