Heating oil

Heating oil, or oil heat, is a low viscosity, flammable liquid petroleum product used as a fuel for furnaces or boilers in buildings.

Heating oil is commonly delivered by tank truck to residential, commercial and municipal buildings and stored in above-ground storage tanks ("ASTs") located in the basements, garages, or outside adjacent to the building. It is sometimes stored in underground storage tanks (or "USTs") but less often than ASTs. ASTs are used for smaller installations due to the lower cost factor. Heating oil is less commonly used as an industrial fuel or for power generation.

Boiler and "forced air" furnace manufacturers have perfected "retention head oil-fired burners" and "triple-pass flue" boilers that have increased oil burner efficiency in forced air furnace to 98% AFUE (Annual Fuel Utilitization Efficiency). Most forced air furnaces remain at an efficiency around 86%.

Red dyes are usually added, resulting in its "red diesel" name in countries like the United Kingdom. Solvent Yellow 124 is added as a "Euromarker" since 2002 in European Union.

Heating oil is very similar to diesel fuel, and both are classified as distillates. It consists of a mixture of petroleum-derived hydrocarbons in the 14- to 20-carbon atom range. That is, heating oil's chemical formula is usually either C₁₄H₃₀, C₁₅H₃₂, C₁₆H₃₄, C₁₇H₃₆, C₁₈H₃₈, C₁₉H₄₀, or C₂₀H₄₂. During oil distillation, it condenses at between 250 and 350 °C (482 and 662 °F). Heating oil condenses at a lower temperature than the heavy (C20+) hydrocarbons such as petroleum jelly, bitumen, candle wax, and lubricating oil, which condense between 340–400 °C (644–752 °F). But it condenses at a higher temperature than kerosene, which condenses between 160–250 °C (320–482 °F).

For efficient burning, the oil is drawn from the tank into a pump and pressurized (residential) to 1,034 kPa (150 psi) and forced through a filtered (specific to appliance) nozzle, into an atomized spray pattern. It is then ignited through the use of a step-up transformer, taking 120 or 240 V AC and stepping it up to 10,000 V AC. The voltage travels down two brass conductors (buzz bars) to the metal/ceramic electrodes and produces a spark approximately 6 mm (1/4 in) across. With the airflow coming from the squirrel cage of the oil-burner, the spark ignites the oil droplets. Through the use of a combustion chamber, the flame is contained, and flue gases travel through the heat exchanger. The heat of the flue gases is transferred through the walls of the heat exchanger as they pass to the chimney, and the fan/blower unit circulates the heat of the heat exchanger throughout the house. With a cold air return generally in the center of the house supplying all or most of the cold air that is return to the furnace for re-heating .

Heating oil produces 138,500 British thermal units (146,100 kJ) per US gallon and weighs 7.2 pounds per US gallon (0.85 kg/l), which is about the same heat per unit mass as the somewhat less dense diesel fuel. Number 2 fuel oil has a flash point of 52 °C (126 °F).

Leaks from tanks and piping are an environmental concern. Various federal and state regulations are in place regarding the proper transportation, storage and burning of heating oil, which is classified as a hazardous material (HazMat) by federal regulators.

Heating oil may be blended with biofuel to create a product similar to biodiesel known as "bioheat".

Heating oil trade

Heating oil accounts for about 25% of the yield of a barrel of crude oil, the second largest "cut" after gasoline (petrol). Options on futures, calendar spread options contracts, crack spread options contracts, and average price options contracts give market participants even greater flexibility in managing price risk.

Heating oil futures are traded on the Intercontinental Exchange (ICE) and NYMEX. These contracts have delivery dates in all 12 months of the year and are used to hedge diesel fuel and jet fuel, both of which trade in the cash market at an often stable premium to NYMEX Division New York Harbor heating oil futures.

United States and Canada

Heating oil is known in the United States as No. 2 heating oil. In the U.S., it must conform to ASTM standard D396. Diesel and kerosene, while often confused as being similar or identical, must conform to their own respective ASTM standards. Heating oil is widely used in parts of the United States and Canada where natural gas or propane is readily not available. Where other fuels are not available, it is sometimes referred to as the unit cost per unit (BTU=British thermal unit or BTUH / h per hour), and can be less than other fuels.

The heating oil futures contract trades in units of 42,000 U.S. gallons (1,000 barrels) and (for the USA) is based on delivery in the New York harbor.

Ireland and Northern Ireland

Heating oil is the most common method of home heating in Ireland due to the lack of a consistent gas pipeline network as well as the multitude of small rural communities. Large oil tanks can be found in most Irish household gardens. Common suppliers of heating oil in Ireland are Maxol and Emo Oil. There are over 200 oil distributors in Ireland. Unlike gas or electricity, there are no affiliated comparison sites. Some non-affiliated comparisons exist including the Consumer Council for Northern Ireland

England, Scotland and Wales

Heating oil is a method for home heating that is used sporadically around England, Scotland and Wales. Similar to Northern Ireland it is the rural areas and communities that rely on oil for the method of heating. It is widely acknowledged that there are around 1.5 million people in the UK using oil for home heating. The UK has many suppliers of heating oil ranging from large companies such as BP and Bayford to the local oil supplier who will cover a very small area. There are some companies which operate offer a comparison service by allowing customers to choose from three prices, a site that is taking that one step further is Which Oil Supplier who will be giving updated prices daily and providing prices of all suppliers for a given postcode.

In addition to the comparison websites there are many groups and sites which offer either bulk buying discounts or assist in the process of group buying. It seems likely that this will become a more important issue with the volatility of crude oil prices which will influence heating oil prices considerably.

K-factor

The degree day system is based on the amount of fuel a customer has consumed between two or more deliveries and the high and low outdoor temperatures during the same period. A degree day is defined as one degree of temperature below 65°F in the average temperature of one day. In other words, to arrive at the number of degree days in one day, the official high and low temperatures for that day must be obtained. The two figures are then averaged, and the number of units this average is below 65 °F is the number of degree days for that day. For example, if for Tuesday, November 3, the high temperature is 70 °F and the low is 54 °F, the average is found by adding 70 and 54, which equals 124, and then dividing by 2. The resultant figure is 62, and by subtracting 62 from 65, it is determined that there were three Fahrenheit degree days that day.

The K factor is the number of degree days in any given period divided by the number of gallons of fuel oil used in a given period. Multiplying K degree-days per gallon by the number of gallon of usable fuel remaining in a tank gives the number of degree-days before a delivery is needed.

Retail cost

United States

In 2008, fuel oil cost was $36.20 a week($34.30/GJ).

The Department of Energy tracks the prices homeowners pay for home heating fuel (oil and propane). There are also a number of websites (for example, lowermyheat.com) that allow home owners to compare the price per gallon they are paying with the Department of Energy data as well as other consumers in their area.

See also

• Oil burner
• Fuel price risk management
• Hazardous material
• Heating, ventilation and air-conditioning (HVAC)
• United States:
  • New England Fuel Institute
  • Northeast Home Heating Oil Reserve