FX.co ★ Heating Oil Near Multi-Year Lows

U.S. heating oil futures have plummeted to around $2.03 per gallon, edging close to their nearly three-year low of $2.00 recorded on April 8th. This drop occurs amidst a broader selloff in the energy market, triggered by investors adjusting their demand projections. Unpredictable U.S. tariff decisions have intensified fears of a global economic downturn, especially following recent U.S. GDP figures that indicated a 0.3% annualized contraction in the first quarter. This decline, the first since 2022, was primarily due to a surge in imports and a notable slowdown in consumer spending. Rising trade tensions between the U.S. and China, the two largest consumers of oil globally, have exacerbated worries regarding future energy demand. From a supply perspective, data from the Energy Information Administration (EIA) showed an unexpected increase of nearly one million barrels in distillate inventories, contrary to predictions of a 1.7-million-barrel decrease. Additionally, heating oil inventories grew by a quarter-million barrels for the week ending April 25th, contributing further downward pressure on heating oil prices.