Heating Oil Price and Outlook

Current heating oil price

Price change

Historical prices

What heating oil is and how it is used

Heating oil is produced from crude oil through distillation followed by refining. It is a flammable fuel used in boilers and furnaces. In terms of its physical and chemical properties, heating oil is similar to diesel. Some households use heating oil for heating. It is popular in the United States, for example, while other heating sources predominate in the UK. After petrol and diesel, it is the third most widely used petroleum product in the world.

There are three types of heating oil: extra-light heating oil (TOEL), light heating oil (LTO) and heavy heating oil (TTO). They are classified by density at 20 degrees Celsius. TOEL has a density of 860 kg/m3, LTO 920 kg/m3 and TTO 990 kg/m3. Heating oil can also be classified by sulphur content or viscosity.

Global heating oil production

Heating oil is a refinery product, specifically a middle distillate produced by processing crude oil. For this reason, its global production is not usually monitored separately. Output is directly linked to the amount of crude oil processed by refineries and how they allocate production among individual distillates. Put simply, the more crude oil is refined worldwide, the more heating oil is produced.

Historical price performance

The price of heating oil has fluctuated significantly over the past 20 years. From a historical perspective, heating oil entered a rally in 2000. Its price was USD 0.75 at the time and rose to USD 4 per gallon over the following eight years, reaching a new high. Heating oil then fell sharply, with its price settling at just over USD 1.

Between 2011 and 2014, heating oil traded steadily at around USD 3. It subsequently reached two lows, falling to USD 0.97 in 2016 and USD 0.61 per gallon in March 2020.

This was followed by a sharp rise. In 2022, the price climbed to record highs above USD 5 per gallon. This was driven by the war in Ukraine and the resulting shortage of middle distillates on the market. Between 2023 and 2025, the price settled into a range of approximately USD 2.30 to USD 3.30 per gallon. Another surge towards USD 4.20 followed in July 2026, triggered by the conflict between the US and Iran.

What affects the price of heating oil

The price of heating oil is largely influenced by crude oil prices on global markets. Crude oil is the raw material used to produce heating oil. It is therefore reasonable to expect heating oil prices to rise when crude oil becomes more expensive.

In addition to economic factors, the geopolitical situation must also be considered. The supply of heating oil is affected by the stability of the countries where crude oil is extracted. Middle Eastern countries often have unstable governments, which can disrupt crude oil supplies and consequently drive up the prices of both crude oil and heating oil. The current tensions surrounding the Strait of Hormuz are a clear example.

On the demand side, the use of heating oil is important because this commodity is widely used to heat homes in the US. If winters become harsher in the coming years, household consumption of heating oil will increase.

Future heating oil price outlook

At the time this article was updated in July 2026, the price of heating oil on the New York Mercantile Exchange (NYMEX) was trading in a range of approximately USD 4.00 to USD 4.20 per gallon. This was its highest level since April.

The main price driver is currently the geopolitical premium associated with the conflict between the US and Iran and the risk of the Strait of Hormuz being closed. Low inventories of middle distillates are also keeping the market tight. Seasonal demand is another significant factor, as heating oil is widely used to heat homes in the US during winter.

If tensions in the Middle East ease and inventories are replenished, the price could return to the more stable range seen in previous years. Rapid movements in either direction are common for this commodity.

How to trade heating oil

Heating oil is traded in gallons. One gallon is equivalent to approximately 3.9 litres. Heating oil is traded on commodity exchanges. One of the best known is the US-based New York Mercantile Exchange (NYMEX), where heating oil is listed under the ticker HO. Retail investors do not trade heating oil very frequently, however. This is reflected in the fact that very few online brokers offer contracts for difference (CFDs) on this commodity. One of them is eToro 52% of retail investor accounts lose money when trading CFDs with this provider. You can find detailed information about the broker in our review.

How can investors gain modern exposure to heating oil, which is usually only physically available during the heating season?

Investing in the energy sector offers many opportunities. One of them is investing in heating oil, an essential commodity in cold climates. If you are looking for a way to benefit from the potential of this part of the commodity market, here is an overview of several ETFs and shares focused on the purchase, processing or distribution of heating oil and related products.

Phillips 66 (ticker PSX) is a major US company focused on refining crude oil and distributing other refined products, including heating oil.

• Business model: Phillips 66 processes crude oil and produces various petroleum products, including heating oil, petrol and other fuels.
• Market capitalisation: The company has a market capitalisation of more than USD 50 billion, making it one of the sector’s leading players.
• Dividends: The company offers a stable dividend, with an annual dividend yield of approximately 3% in recent years.
• Risk: The company’s shares are exposed to risks associated with volatile crude oil prices and regulatory changes in the energy sector.
• Expansion: Phillips 66 is actively investing in improvements to its refining capacity and more environmentally friendly technologies, which could strengthen the company’s long-term prospects.
• Available from broker: eToro.

Invesco DB Oil Fund (DBO) is an ETF focused on investing in oil commodities through futures contracts. The fund aims to track the performance of the DBIQ Optimum Yield Crude Oil Index Excess Return, which gives investors exposure to crude oil prices while seeking to optimise returns from oil futures contracts.

• Fund objective: The fund tracks the performance of an index focused on various futures contracts for petroleum products, including heating oil.
• Exposure: This fund offers diversified exposure to petroleum products, helping to reduce the risk associated with a single commodity.
• Assets under management: The ETF manages assets worth more than USD 400 million, making it a sound option for investors and a relatively large fund.
• Liquidity: The fund has relatively high liquidity, allowing its units to be bought and sold easily.
• Dividends: The ETF does not currently pay dividends.
• Available from broker: eToro.

Valero Energy Corporation (ticker VLO) is a major US company that owns refineries, distributes fuels and specialises in producing a wide range of products, including petrol, diesel and petrochemicals. The company also invests in modernising its refineries and improving efficiency, allowing it to remain competitive in the global energy market.

• Business model: Valero specialises in refining and distributing various fuels, including heating oil.
• Market capitalisation: The company has a market capitalisation of approximately USD 45 billion, making it a major player in the energy sector.
• Dividends: Valero is known for its stable dividend policy, which attracts long-term investors. Its current annual dividend yield is around 3%.
• Risk: The company’s shares may be affected by changes in crude oil prices, regulations and demand for fossil fuels.
• Available from brokers: eToro and XTB.

Energy Select Sector SPDR Fund (ticker XLE) is a broadly diversified ETF focused on the energy sector. It includes companies involved in processing and distributing petroleum products, including heating oil.

• Fund objective: The ETF focuses on companies in the energy sector of the S&P 500, providing broad exposure to petroleum products.
• Exposure: The fund includes some of the sector’s largest companies, supporting its relative stability and return potential.
• Assets under management: The ETF manages assets worth more than USD 30 billion, making it one of the largest funds in this sector.
• Liquidity: The fund is a highly liquid ETF.
• Volatility: Although the ETF provides diversification, it remains exposed to fluctuations in crude oil prices and global energy trends.
• Available from broker: eToro.

Investing in heating oil may be an attractive option for investors seeking exposure to the energy sector. Buying heating oil in physical form is not practical. Investors can therefore gain exposure to heating oil through modern investment products such as ETFs and shares.