Heating oil futures fell toward $4 per gallon on Wednesday as traders balanced tentative optimism over a potential Middle East ceasefire against signs of tightening domestic supply. Prices eased after President Donald Trump said Iran was seeking a ceasefire, while stressing that the United States would only consider an agreement once the Strait of Hormuz is fully operational and secure.
These developments helped pull energy prices back from the extreme levels seen in March, when oil rallied more than 50%, marking its strongest monthly gain since 2020. At the same time, US heating oil inventories declined by 0.81 million barrels in the week ended March 27th, following a 0.24 million-barrel drop the prior week.
The drawdown in heating oil coincided with a sharp contraction in broader distillate stocks, which fell by 2.11 million barrels—more than three times the expected decline—while crude oil inventories rose by a larger-than-forecast 5.45 million barrels.
