Furnace oil, also known as home heating oil or fuel oil, is a petroleum-based fuel used for heating homes, businesses, and industries: What it is A byproduct of crude oil, furnace oil is a dark, viscous fuel made from the heavier fractions of crude oil. It\'s a common fuel for central heating systems. How it\'s made Furnace oil is produced through a refining process that separates crude oil into different fractions. Similar to diesel Furnace oil is often confused with diesel because of their similar properties, but they have different chemical compositions. Other uses Furnace oil can also be used in engines to generate power.