This winter season is shaping up to be a typical cold season, compared to the last year's unusually warm months, and U.S. households are burning oil to combat the chill. Investors can gain exposure to the higher heating oil prices through a related exchange traded fund.
The U.S. Heating Oil Fund (NYSEARCA:UHN), which follows the changes in the price of heating oil futures, was up 1.2% over the last day but was down 0.3% during trading Wednesday. The fund declined 8.2% over the past three months.
The U.S. Energy Information Administration calculated that households will pay an average $2,544 for heating oil between Oct. 1 and March 31, or 22% higher year-over-year for the same period, due to a 3.1% rise in prices and a 18% surge in demand, reports Barbara J Powell for Bloomberg.
Heating oil futures were up again Wednesday, increasing 1.8% in afternoon trading.
Overall, around 6% of U.S. households utilize heating oil for air heating, and the Northeast makes up 80% of these households.
Heating bills are expected to be higher because the energy department forecasts a more typical winter, as compared to the unusually warm winter last year, reports Sarah Shemkus for The Boston Globe.
"We have an awful lot of people in need," John Drew, president of Action for Boston Community Development, an administer of heating oil, said. "They're more desperate than last year."
U.S. Heating Oil Fund
Max Chen contributed to this article.
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