FX.co ★ Heating Oil Rebounds from 4-Month Low

Heating oil futures in the US have increased to $2.19 per gallon, recovering from a four-month low of $2.15 recorded on October 16th. This rise is attributed to a significant decrease in distillate inventories coupled with the onset of winter demand, despite weak crude feedstock costs. According to data from the Energy Information Administration, distillate fuel oil stocks experienced a decline of 4.53 million barrels during the week ending October 10th, following a previous week's draw of 2.02 million barrels. As a result, inventories are now approximately 7% below the five-year average. Concurrently, refinery operations have decreased to around 85.7% capacity, which has restricted product output. Additionally, meteorologists have adjusted their two-week forecast to predict cooler weather conditions through early November, leading to expectations of increased heating demand. With supplies visibly tightening for heating fuels amid rising seasonal demand and strong export interest in distillates, the distillate market has outpaced most other oil benchmarks.