US heating oil futures climbed above $2.60 per gallon, nearing a four-week high, as a powerful winter storm in the Northeast boosted expectations for stronger heating demand. A snowstorm described as one of the worst on record forced school closures and caused widespread flight disruptions across the region, driving up short-term fuel consumption.
Prices also drew support from supply data, after the EIA reported that distillate inventories dropped by 4.6 million barrels to 120.1 million, far exceeding forecasts for a 1.4 million barrel decline. At the same time, markets were tracking geopolitical tensions involving Iran: Donald Trump said he was considering a limited military strike, while Iranian Deputy Foreign Minister Abbas Araghchi indicated there could be a diplomatic way forward.
Even so, projections for warmer-than-normal temperatures in the coming weeks may cap further price gains.
