US heating oil futures traded at $3.95 per gallon, retreating from the two-month high of $4.02 reached on July 14th, as stronger inventory data temporarily countered an otherwise tightening supply environment. According to EIA data, distillate fuel stocks rose by 4.6 million barrels in the week ending July 19th, almost fully reversing the draw recorded a week earlier. This inventory build partially offset the impact of declining Strategic Petroleum Reserve (SPR) levels, even as escalating strikes between the US and Iran continued to disrupt global supplies of crude oil and refined products.
At the same time, Russia — a major diesel producer — halted diesel exports and became a net importer, as higher crude prices intensified the effects of successive Ukrainian attacks on its largest refineries. These developments amplified the impact of refinery bottlenecks in the US and direct damage to facilities in the Middle East. As a result, diesel crack spreads climbed to a record high in July.
