US heating oil futures fell to around $4.17 per gallon, their lowest level since late August, as growing expectations of faster progress toward ending the US–Iran conflict put downward pressure on prices. The Democrats’ victory in both chambers of Congress in the US midterm elections increased the likelihood of tighter controls on military spending and renewed efforts to secure a peace agreement.
At the same time, the US Department of Energy plans to loan 300,000 barrels of heating oil from the Northeast Home Heating Oil Reserve to four companies to ease supply constraints and temper prices ahead of winter. This volume accounts for nearly one-third of the reserve, with deliveries scheduled by November 6. The companies will be required to return the same volume plus a premium before the start of next year’s heating season.
Nonetheless, supply conditions remain tight. US distillate inventories—which include diesel and heating oil—declined by 3.6 million barrels in the week ended October 30, leaving stockpiles 13% below the five-year average.
