US heating oil prices have risen to about $5.12 per gallon, the highest level on record, as supplies of refined products grow increasingly tight. Data from the EIA showed that US distillate inventories—which include diesel and heating oil—expanded by 2.1 million barrels in the week ended September 4. However, stockpiles remain 13% below the five-year average, underscoring that inventories are still relatively low. At the same time, US refineries operated at 97.8% of capacity during the week, leaving little scope to significantly increase distillate output.
The supply squeeze is being compounded by escalating global risks. Houthi attacks have targeted Saudi energy infrastructure, disruptions in the Strait of Hormuz have persisted, and Ukrainian strikes on Russian refineries—combined with Russia’s export curbs—have further constrained diesel supplies. On the demand side, seasonal agricultural activity and the approach of the winter heating season are likely to bolster distillate consumption, adding further pressure to already tight supplies.
