While crude oil prices may begin to come down, heating oil could heat up your bills and related exchange traded funds (ETFs).
While prices are down to their lowest levels in months, the nation’s heating oil supplies are also down 9.8% compared to the same time last year. In New England, the supply drop is even sharpter, around 49%. In that region, many households are warmed with heating oil during their long, cold winters, reports Ana Campoy for The Wall Street Journal.
Crude oil ended the week at $115.46 per barrel, while heating oil was at $319.19 per gallon.
The refiners have plenty of spare capacity but due to low profit margins, the desire to ramp up production is not there-yet.
The approximately eight million households that use heating oil should expect to pay an average $4.34 a gallon, or $2,644 for the heating season, up more than 30% from $3.31 a gallon, or $1,939, over last winter, according to estimates by the Department of Energy, reports Campoy.
If prices stay high, the United States Heating Oil Fund (UHN) could benefit.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.