US heating oil prices fell 3% to about $4.20 per gallon, pulling back from a 3½‑month high of $4.34 reached in the previous session, as broader crude and refined product markets weakened amid signs of renewed US–Iran diplomacy. Reports suggested that Pakistan, backed by China, is attempting to restart talks, raising hopes for a possible easing of regional tensions.
Even so, the conflict in the Middle East escalated this week, with US Central Command carrying out its 13th consecutive night of strikes on Iran. Outside the region, Russian fuel supplies remain tight: less than half of the refinery capacity damaged by Ukrainian drone attacks has been restored, leaving roughly 45 million tonnes of annual capacity still offline.
At the same time, forecasts for warmer‑than‑normal weather through August 7 are expected to support power sector demand. On the supply side, EIA data showed that distillate inventories—which include heating oil and diesel—increased by 1.395 million barrels in the week ended July 17.
