FX.co ★ Heating Oil Rebounds

U.S. heating oil futures have climbed above $2.10 per gallon, recovering from a nearly three-year low of $2.00 per gallon noted on April 8th. This rise is attributed to increasing costs of crude oil feedstock and diminishing worries about weak energy demand. Additionally, a larger-than-anticipated drop in distillate inventories has bolstered prices. Market sentiment improved with prospects for renewed U.S.-China trade negotiations, as Beijing indicated a willingness to talk. However, this readiness is dependent on key changes from Washington, including more respectful dialogue and the appointment of a designated negotiator supported by former President Trump. This rekindled optimism surrounding trade tensions has contributed to the upward momentum in oil prices. Concurrently, the latest report from the Energy Information Administration (EIA) indicated a 1.85 million-barrel drawdown in U.S. distillate stocks for the week ending April 11th, surpassing the forecasted 1.2 million-barrel decrease, with heating oil inventories remaining steady for the second consecutive week.