Fuel Oil Futures Margin & Contract Specifications

What Is Fuel Oil?

Fuel oil is a heavy petroleum product. It is a heavy distillate obtained after crude oil refining, following gasoline and diesel. Fuel oil has high viscosity and relatively high sulfur content, and is considered a mid- to downstream product of crude oil refining. It is mainly used for power generation, marine shipping, industrial boilers, and large-scale equipment.
As a fundamental cost component of global logistics, fuel oil prices directly affect shipping, industrial production, and inflation.

Factors Affecting Fuel Oil Prices

1. Crude Oil Prices

As a downstream refined product, 70%–80% of fuel oil price movements are driven by crude oil prices.
When global supply is excessive, fuel oil prices face downward pressure. Conversely, when crude oil supply is tight and crude prices rise, higher input costs push fuel oil prices upward.

2. Weather and Seasonal Demand

Fuel oil exhibits strong seasonality. Prices are typically lower in summer and peak in winter. Cold winters in North America and Europe can sharply boost demand and cause price spikes, while mild winters tend to suppress prices. Weather forecasts from the U.S. National Oceanic and Atmospheric Administration (NOAA) are a key reference.

3. Refining Margins and Crack Spreads

Refining margins and crack spreads reflect the profitability of converting crude oil into fuel oil. Refineries often conduct scheduled maintenance in spring and autumn, or face unplanned shutdowns due to hurricanes. These disruptions reduce refined product supply; even if crude prices are stable, fuel oil prices may rise independently as crack spreads widen.
The crack spread—the difference between crude oil prices and refined product prices—represents processing profit. Because refineries typically require over one month to procure and process crude oil, crack spreads are often viewed as a leading indicator of crude price trends. The weekly EIA crude oil inventory report (released on Wednesdays) is especially important.

4. Shipping Demand (Global Trade)

Strong global trade boosts logistics activity, directly supporting fuel oil prices. If global trade contracts due to geopolitical tensions, reduced logistics demand can lead to inventory accumulation of diesel and fuel oil, pressuring prices lower.

5. Environmental Regulations

Environmental regulations are reshaping both production costs and demand. The International Maritime Organization (IMO) mandates the use of low-sulfur fuels for shipping, diverting large volumes of low-sulfur fuel previously used for heating into maritime use. This intensifies supply competition and affects fuel oil prices.
To comply with environmental rules, many older refineries have been forced to shut down or convert into bio-refineries, reducing total traditional fuel oil capacity. During demand peaks—such as cold snaps—this makes supply shortages and sharp price surges more likely.
In addition, higher carbon taxes on fossil fuels in the EU and parts of North America further raise fuel oil prices.

6. Competition from Alternative Energy

Substitution effects also influence fuel oil prices. For example, if natural gas prices remain high, some industrial users may switch to fuel oil, increasing demand; if gas prices fall, the opposite substitution occurs.
In recent years, the market share of B99 biodiesel has been rising in markets such as New York, partially weakening the structural demand for traditional fuel oil.

7. Geopolitics

Developments in a potential Russia–Ukraine peace agreement can also affect fuel oil prices. If sanctions on Russia are lifted, large volumes of Russian diesel could return to global markets, putting downward pressure on global fuel oil prices.

Heating Oil Margin

How much money is needed to trade futures? At the beginning, the required margin is the initial margin. While holding a position, the margin after deducting floating profits and losses must remain above the maintenance margin; otherwise, a margin call will be issued. For day-trading margin, only half of the margin is required, provided the position is closed before the market closes.

Foreign Futures

Heating Oil Contract Specifications

Here is a summary for traders of the contract specifications, exchange, trading hours, minimum price fluctuation, and available trading months for Heating OilFutures.

Heating OilLast Trading Day

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