Heating Oil Prices and Crude Oil

Heating oil, diesel and ULSD: the same barrel

Heating oil, on-road diesel and jet fuel all come from the middle distillate part of the barrel. A typical US refinery gets about 11 to 12 gallons of distillates from each 42-gallon barrel of crude, according to the EIA. Heating oil sold to homes in the Northeast is now mostly ultra-low sulfur, so it is close to identical to on-road diesel. Because they share supply, a shortage of diesel or jet fuel pushes up heating oil too.

NYMEX HO futures

The NYMEX contract still carries the ticker HO from its heating oil origins, but since 2013 it has specified ultra-low sulfur diesel delivered in New York Harbor. One contract covers 42,000 gallons (1,000 barrels), it is quoted in dollars per gallon, and a one-tick move of $0.0001 equals $4.20. Heating oil dealers, airlines, truck fleets and railways use it to hedge, and it is one leg of the standard 3-2-1 crack spread.

Why distillates can rise faster than crude

• Low inventories. The EIA's October 2026 STEO reports that East Coast distillate stocks were 32% below their five-year seasonal average in September, and forecasts them to stay about 20% below through the winter. Low stocks leave little buffer for a cold snap.
• Lost refining capacity. Damage to refineries in the Middle East and Ukraine's drone campaign against Russian plants cut global capacity by about 2 million barrels per day, according to Reuters columnist Ron Bousso (13 October 2026). Less refining means fewer distillates, regardless of crude supply.
• Competition between uses. Trucking, farming, shipping, aviation and heating all draw on the same distillate pool. Refiners can shift yields only slightly between gasoline and distillates.
• Russian product sanctions. Since the EU banned imports of Russian refined products in February 2023, Europe has bought more diesel from the US, the Middle East and India, tightening the Atlantic market.
• Winter demand. Heating oil demand is concentrated in the Northeast from October to March, which depends on shipments from the Gulf Coast and imports.

The result is that the heating oil price can double while crude rises by half. Between February and September 2026, Brent's monthly average rose 61% while New York Harbor ULSD rose 98%.

Who uses heating oil

About 4.79 million US households used heating oil as their main heating fuel in winter 2023–24, and about 82% of them were in the Northeast, according to the EIA. Usage is falling as homes switch to natural gas and heat pumps, but the fuel remains common in New England and the Central Atlantic states. On 5 October 2026 the EIA's weekly survey showed residential heating oil at $6.037 a gallon in New England and $6.084 in the Central Atlantic region.

What goes into the retail price

For the winters from 2012–13 to 2021–22, the EIA estimated that crude oil made up 48% of the average residential price, distribution and marketing about 37% and refining about 15%. The distribution share is much higher than for gasoline because heating oil is delivered by truck to individual homes in small volumes. The EIA stopped publishing this breakdown in 2022. The weekly residential survey runs from October to March; outside the heating season, prices are collected once a month.

Heating oil versus natural gas

Heating oil is usually more expensive per unit of heat than piped natural gas in the US. At $6.04 a gallon and about 0.138 MMBtu per gallon, heating oil costs about $44 per MMBtu delivered, against a Henry Hub wholesale price under $3 per MMBtu in September 2026. Residential gas includes large delivery charges, but the gap is still wide. See natural gas prices.

Tips for buyers

The EIA notes that prices are usually lower in late summer or early autumn, when dealers have more capacity and buyers can arrange tank fills ahead of winter. Many dealers offer budget plans that spread payments, or fixed-price and capped-price contracts that work like a hedge. Low-income households may qualify for the federal Low Income Home Energy Assistance Program (LIHEAP). For the link between distillates and transport fuel, see diesel prices. For the gasoline side of the barrel, see gasoline prices.