Fuel oil is a lighter type of oil, or a liquid byproduct of crude oil, which is used for energy, especially for heating. When petroleum is refined, there are two main categories under which it is classified: distillate oils, including diesel, and residual oils, which include things like kerosene. There are different types of fuel oils in each category. The distillate type is generally used for home heating.
While gasoline is also a byproduct of the petroleum refining process, it is far less stable than the fuel oil used to heat homes and commercial properties. Even so, the rise and fall of gas prices is generally a good indicator of the stability, or lack thereof, of other oil prices. Since the price of crude oil directly affects the price of oil used for fuel, consumers should be prepared to pay more to heat their homes as the worldwide demand for oil and gas continues to increase.
The costs of refining must also be figured in to the price, as must the costs of transporting and distributing it. When the price of crude oil rises, gas prices go up, so the price of transporting fuel oil does as well. This may be felt even more by families that live in rural locations, requiring longer trips to transport and distribute the oil.
Seasonal issues tend to play a role in the price of fuel oil as well. During periods when the demand for gasoline is high, refining companies process less oil for heating. This means that, when the demand for home heating oil increases, so will the price because the supply is limited. This fact often causes the price to rise quickly and sharply.
In the U.S., much of the oil that is consumed, including heating oil, comes from foreign sources. Some of the refining is done in the domestically, but the rest is refined in other countries such as Canada or Venezuela, which may also affect the price.
