Heating Oil Market: Key Trading Insights

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Bearish Momentum Intensifies as Heating Oil Tests Critical Support

Heating oil has dropped sharply to $2.40, with heavy trading volume suggesting increased selling pressure. The critical support level at $2.20 is now key - a break below could accelerate downside movement. ✏️

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Crude Oil Correlation Points to Further Weakness

Strong correlation with crude oil continues as both markets show ~9% decline this month. High volume during price drops above 70,000 contracts signals persistent bearish sentiment. ✏️

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Optimal Trading Windows Identified for Best Execution

Monday and Friday sessions offer best liquidity for large trades. Traders should be cautious of increased price spike risks during mid-week when volume drops 31% below average. ✏️

Recent Price Trends Show Bearish Momentum with High Volatility

Daily closing prices with 5-day moving average and trading volume over the past month showing the recent downward trend in heating oil prices.

Key Support and Resistance Levels Indicate Strong Price Boundaries

Price action with 30-day rolling support and resistance levels showing the current trading range.

Strong Correlation Between Heating Oil and Crude Oil Prices, Divergence from Natural Gas

Scatter plot showing the correlation between heating oil and crude oil prices with trend line overlay and correlation coefficient.

Initial Predictive Model Performance for Heating Oil Prices

Time series comparison of actual heating oil prices versus model predictions, showing the model's accuracy and confidence intervals over time.

Market Regime Analysis Reveals Distinct Price Patterns and Risk Scenarios

The cluster analysis identifies five distinct market regimes, with the dominant regime accounting for 63.2% of trading days, characterized by stable price movements and average volatility.

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Price changes in the dominant regime show a slight downward bias with an average daily change of -1.9%, suggesting a tendency for gradual price erosion in stable periods.

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The second most common regime (14.2% of days) exhibits higher volatility with heating oil prices averaging 2.85 USD, significantly above the overall mean of 2.58 USD, indicating potential upside risk periods.

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Trading volumes show consistent patterns across regimes with only minor variations (0.99 ratio to mean), suggesting that volume is not a strong predictor of regime shifts.

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Stacked area chart showing the distribution of different market regimes over time with heating oil price levels overlaid, revealing how market regimes evolve and their relationship with price levels.

Seasonal Patterns and Enhanced Price Predictions Reveal Key Trading Opportunities

The enhanced predictive model shows strong seasonal patterns with higher price volatility during winter months (heating season), particularly in months 1-3 where daily ranges are 42% above average.

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Day-of-week analysis reveals that Mondays and Fridays exhibit the highest trading volumes, suggesting optimal times for executing larger trades with minimal price impact.

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The model's feature importance analysis shows that while crude oil prices remain the dominant predictor (41.3% importance), the addition of seasonal features has improved prediction accuracy by 2.1 percentage points to 95.6%.

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Risk analysis indicates a higher probability of price spikes during low-volume periods, particularly during mid-week trading sessions where volume is 31% below average.

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Line plot showing the seasonal patterns in heating oil price volatility, with higher volatility observed during winter months (heating season).