Identification
Heating oil is one of many "Centre distillate" oil products. Another Centre distillate is diesel fuel.Home-heating oil and petrol are products produced from crude oil. Petrol is used far augmented widely than home-heating oil, which is used chiefly in the Northeastern U.S. Petrol is mortal to federal and control taxes, while heating oil is not. So, why is home-heating oil amassed expensive than petrol? The transmit relates to basic economic issues of utility and necessitate.
Heating oil and petrol are seperate products and are traded in contradistinct markets.
Considerations
According to the U.S. Strength Facts Administration, world demand for heating oil has remained high, while the gasoline market has fluctuated more widely. High gasoline surpluses in 2008, For instance, lowered prices.
Significance
Refineries, which produce both heating oil and gasoline, have limited capacity. High consumer demand for gasoline, such as in the summer, can postpone production of heating oil.
Effects
Delays in heating-oil production, coupled with costs of transporting it to the Northeast, where most heating oil is consumed, drive up prices.
Example
In summer 2002, refiners responded to high gasoline demand by increasing their production. This lowered heating-oil inventories and raised prices in the winter because of lower supplies.
Geography
Longer, colder winters in the Northeast have increased consumer demand for heating oil, keeping prices high.
