Heating oil is a refined oil made from petroleum, used in furnaces to heat buildings. It is the main source of heat in about 8.1 million American homes. People living in the northeast US are more likely to heat their homes with heating oil than other parts of the country, consuming more than 80% of the home heating oil used every winter.

Heating oil is similar to diesel oil, and the process of refining it is very similar. People whose homes rely on heating oil for heat in the winter are justifiably concerned about the cost of heating oil. As with every petroleum product, the price of heating oil goes up and down, depending on the cost of the crude oil from which it is made and other variables such as refinery capacity.

Heating oil is trucked to individual homes and pumped into underground storage tanks. Since heating oil is more expensive in the winter, when demand is high, most people will have their tanks filled in the summer or early fall when prices are lower. Unfortunately, home heating oil tanks are rarely large enough to store enough fuel to last through the winter, so homeowners must purchase more oil at winter prices.

Weatherproofing your home can help keep heating oil costs down in the winter. Make sure that your windows and doors are close-fitting and install weather stripping around them to keep out drafts. Passive solar systems can also be useful. If you have north-facing windows, allow the sun in to heat the north of your house during the day; cover windows with insulated curtains as the sun goes down to prevent heat loss.

Some heating oil suppliers will spread your heating oil costs out over the entire year; this lessens the shock of having huge utility bills in the winter months, at the cost of paying a little more during the warmer months. Of course, turning down the thermostat when you are away and wearing more layers when you are at home are the simplest ways to lower your heating oil costs.