FX.co ★ Heating Oil Extends Downturn

Heating oil futures in the United States have declined to approximately $2.31 per gallon, down from a two-month peak of $2.45 reached on September 26. This change follows an unexpected shift in weekly supply data and a drop in crude prices, both of which alleviated the recent market pressure. According to the Energy Information Administration (EIA), distillate inventories increased by 0.58 million barrels in the week ending September 26, contrasting with a 1.69 million barrel decrease observed the previous week and surpassing the anticipated 1 million barrel decrease. Furthermore, U.S. commercial crude stocks expanded by about 1.79 million barrels, while heating oil inventories rose by 187,000 barrels. Refinery inputs decreased by roughly 308,000 barrels per day, with utilization rates hovering around 91.4%, indicating potentially weaker end demand or a decline in middle distillate exports. Concurrently, the potential for increased OPEC+ production and indications that Saudi Arabia is planning another production hike in November put pressure on crude benchmarks and helped lower feedstock costs for distillates.