A Heating Oil ETF for End Users

A post from Seeking Alpha talks about buying a heating oil ETF (UHN) as a proxy hedge for a prebuy:

In the summer, my local heating oil services let me "lock in" the price of heating oil if I want. At $4.25/gallon, I passed. But with oil down at $2.50/gallon, locking in the price is more attractive. Trouble is, my oil supplier ends its "lock-in" window in August.

With UHN, however, I have a chance. I'm guessing I'll spend about $1,625 this year on heating oil. Right now, UHN (which tracks the price of near-month heating oil contracts on the NYMEX) is trading for $28.20/share. So all I have to do to lock in my fuel costs is buy 58 shares of UHN, stick them in my brokerage account, and sell out in May.

Of course, it's not a perfect hedge. Local oil costs don't match perfectly with national costs, and the timing when I get oil deliveries will influence my expenses. But if oil goes back to $3.50/gallon or more, I'll make a tidy profit on UHN to counteract the rising costs of my heating bill. Is that worth a $20 round-trip on commissions? Maybe.