FX.co ★ Heating Oil Hovers at Yearly Highs

US heating oil futures have climbed above $2.60 per gallon, reaching yearly highs amid concerns over supply and an anticipated increase in demand as winter approaches. The market is confronting a shortage of distillate fuel in the United States, with current inventories falling significantly below seasonal averages. Additionally, potential disruptions in crude supply are linked to recent Western sanctions imposed on Russian oil producers such as Rosneft and Lukoil. Meanwhile, crude oil benchmarks are under pressure due to projections of increasing global inventories and a predicted supply surplus that could last through 2026, as non-OPEC production is expected to grow at a faster pace than demand. The market is currently balancing these supply concerns and the arrival of colder weather in the Eastern US with the longer-term bearish projections for crude oil.