Heating Oil Prices Could Warm Up Related ETFs This Winter

September 05, 2008 at 12:00 pm by Tom Lydon

Be sure to sit down when you open that heating bill in a few months: heating oil costs are expected to skyrocket this winter and it might benefit the exchange traded fund (ETF).

People are already dreading this winter and the energy bills it could bring. Refinery plants are operating at 86% capacity because of the small profit margins, reports Elisha Sauers for RedOrbit. That’s 6% below the rate refiners were running at the same time last year. Low supplies often send prices sky-high.

Many customers are already wondering if they should lock in the prices now, since they’re relatively low. WMUR New Hampshire reports that last year at this time, heating oil went for $2.45 a gallon; this year, it’s $3.79 a gallon. Whatever customers decide, it’s recommended that they lock in soon, because by mid-September, prices begin to tick up.

Another way people can hedge the price of heating oil is through the United States Heating Oil (UHN), which seeks to track the price movements of the fuel through futures contracts. It’s down 7.2% since its April 10 inception.