US heating oil prices fell more than 3.5% to $4.63 per gallon, hitting a three-week low as expectations of increased fuel supply eased market concerns. In Europe, authorities plan to release 42 million barrels from strategic reserves over three months, with about half of that volume in diesel. At the same time, additional Chinese fuel-export quotas and higher production in other regions are expected to further bolster global availability.
Market tightness may also ease following reports of an agreement to boost Russian diesel shipments to the US and other global destinations, after the US Treasury temporarily authorized certain transactions involving Russian diesel. Still, domestic supply constraints remain evident: US distillate inventories fell by 1.5 million barrels in the week ended October 23, leaving stockpiles 10% below their five-year seasonal average.
Prices also came under pressure as intensified diplomatic engagement between Washington and Tehran reduced some concerns over potential renewed US military action against Iran and the risk of further disruptions to energy flows from the Middle East.
