Fundamentals of Heating Oil Futures (HEO)

Heating oil is produced from the refining of crude oil. The refining of crude yields 50% gasoline and 25% heating oil. This product of crude oil is also called distillate or Number 2 oil. In Europe, heating oil is called gas oil.

Heating oil is used primarily to heat homes in Northeast America. The US produces roughly 85% of its heating oil and imports the rest from Canada, Venezuela and the Virgin Islands. The production of heating oil generally increases in winter to ensure sufficient supply of oil to meet the seasonal demand. Heating oil futures are traded on the New York Mercantile Exchange (NYMEX) and on the ICE Europe Exchange.

Heating Oil Futures: How Weather Impacts Price

Traders dealing in heating oil futures should consider checking weather reports regularly. The importance of weather reports increases substantially during the winter months (from December to February). The focus should be on Northeast USA, as this region accounts for 80% of America's heating oil consumption.

Trading Heating Oil Futures: Tips

Here are some tips when trading heating oil futures:
• Heating oil prices typically move in sync with that of crude oil
• Most profit-making opportunities arise during the winter months. Prolonged periods of extreme cold or an unanticipated cold wave in Northeast USA can cause a rally in the price of heating oil futures

• Buying heating oil futures in winter does not assure success in futures trade. Profit-making opportunities arise only when the weather is colder than anticipated. This results in the higher-than-expected consumption of heating oil during the season, boosting demand.

Specifications for trading Heating Oil with Easy-Forex ®

Easy-Forex ® Symbol for Heating Oil: HEO

Quote convention: USD per metric ton,. HEO / USD = 1.7200 USD per metric ton.
Expiration date: All HEO deals will expire at 12:00 GMT one business day before the last business day of the month preceding the delivery month. Click here to find out more about Rollover of HEO deals to new contracts.

Trading hours: Trading is conducted 01:30 London time until 22:30 London time, Monday to Friday. Outside these hours no opening or closing of deals will be allowed. Go to Trading Hours page to see the hours of trade for other currencies and commodities.

Easy-Forex Symbol for Gas Oil: GAS

Quote convention: USD per metric ton, e.g. GAS / USD = 540.00 USD per metric ton.
Expiration date: All GAS deals will expire at 10:00 GMT two business days prior to the 14th calendar day of the relevant futures delivery month. Click here to find out more about Rollover of GAS deals to new contracts.

Trading hours: Trading is conducted 01:30 London time until 22:30 London time, Monday to Friday. Outside these hours no opening or closing of deals will be allowed. Go to Trading Hours page to see the hours of trade for other currencies and commodities.

Gas Oil Trading (GAS)

Gas oil is a product of crude oil and is used for heating purposes and for generating power. Therefore, it is also called heating oil in the US. Gas oil accounts for about 25% of the yield from a barrel of crude oil. This represents the second largest "cut" after petrol.

Gas Oil Trade

Gas oil is traded widely in Europe as a hedging tool for the physical industry. Traders can conduct trade in gas oil via futures, options, crack spread options or average price options contracts. The availability of several trading contracts offers traders improved flexibility in managing their price risks. Trading for gas oil futures contracts is conducted on the Intercontinental Exchange (ICE) and New York Mercantile Exchange (NYMEX).
Gas oil options and futures are used by:

• companies to hedge against diesel and jet fuel costs. Both diesel and jet fuels trade in the cash market at a premium to NYMEX Division New York Harbor gas oil futures
• traders to capture profit-making opportunities.

The underlying physical asset for gas oil futures contracts, as offered on the ICE exchange, is gas oil barges delivered in ARA (Antwerp, Rotterdam and Amsterdam). Gas oil futures contracts are used as the pricing reference for all distillate trading across Europe and other countries.

Trading in Brent Oil

The trading of Brent crude originally started in the International Petroleum Exchange (IPE) in London. An open-outcry method was followed. However, the trading of this crude oil shifted to the electronic Intercontinental Exchange (ICE) in 2005. In ICE, the Brent crude oil started trading with the symbol LCO, with each contract equaling 1,000 barrels (160 m3). Brent oil contracts in the ICE are quoted in US dollars.
Specifications for trading Brent Oil with Easy-Forex ®

Easy-Forex ® Symbol for Brent Oil: BRT

Quote convention: USD per barrel, e.g. BRT / USD = 80.00 USD per barrel.
Expiration date: All BRT deals will expire at 12:00 GMT on the 15th day before the first day of the contract month. If the 15th day is a non-business day, deals will expire on the business day preceding the 15th calendar day. Click here to find out more about Rollover of BRT deals to new contracts.

Trading hours: Trading is conducted 01:30 London time until 22:30 London time, Monday to Friday. Outside these hours no opening or closing of deals will be allowed. Go to Trading Hours page to see the hours of trade for other currencies and commodities.

The Basics of Brent Oil Trading (BRT)

Brent oil is the light, sweet crude sourced from the North Sea. This crude oil was named 'Brent' after the Brent goose, as the oil exploration company Shell Oil had a policy to name its fields after birds. This crude oil is also known as Brent petroleum, Brent blend and London Brent and is used as a benchmark to price two thirds of the world's internationally traded crude oil supplies. Thus, when an economist mentions the price of oil, there is a high probability that they are quoting the cost of a barrel of Brent oil. This price is based on deals in the London-based Brent market, which is an informal arena where about $ 100 billion worth of oil contracts are traded each year.

Characteristics of Brent Oil

The following are the characteristics of Brent oil:
• It is of a high-quality grade
• Brent is light crude oil. However, its viscosity is higher than that of WTI crude
• It contains roughly 0.37% of sulfur. As a result, it is classified as sweet crude
• It is best for the production of middle distillates and gasoline
• Brent is typically refined in Northwest Europe. However, it is also refined in the East or Gulf coasts of the US and even the Mediterranean region when the market environment is favorable for exports.

Easy-Forex ® Symbol for WTI Oil: OIL

Quote convention: USD per barrel, e.g. OIL / USD = 75.00 USD per barrel.
Expiration date: All OIL deals will expire at 12:00 GMT on the fourth US business day prior to the 25th calendar day of the month, preceding the relevant futures contract month. If the 25th day is a non-business day, trading shall cease on the fourth business day prior to the business day preceding the 25th calendar day. Click here to find out more about Rollover of OIL deals to new contracts.

Trading hours: Trading is conducted 01:30 London time until 22:30 London time, Monday to Friday. Outside these hours no opening or closing of deals will be allowed. Go to Trading Hours page to see the hours of trade for other currencies and commodities.

Trading in WTI Crude Oil (OIL)

West Texas Intermediate (WTI) crude oil is a light, sweet crude oil produced in Midland, West Texas, USA. Easy-Forex ® bases its contract on the US standard for Oil trading, namely the WTI. Also known as Texas Light Sweet, WTI is a type of crude oil used as a benchmark in oil pricing and the underlying commodity of the New York Mercantile Exchange's (NYMEX) oil futures contracts. The price of this contract is widely quoted across analyst reports as the benchmark for global oil prices.

Characteristics of WTI Crude Oil
WTI crude oil has:
• High quality grade
• Less than 5% sulfur content
• Faint sweet taste (which is why it's often called 'light sweet crude').
WTI crude oil also has a lower level of other impurities, as a result of which it is easier to refine. Moreover, it is easier to transport than heavy sour oil, which has a high wax content, high density and high viscosity. Due to its scarce availability, the demand for WTI crude oil is always likely to remain high. All these factors make WTI crude oil the world's most liquid oil commodity in an electronic marketplace.
Specifications for trading WTI Oil with Easy-Forex ®