FX.co ★ Heating Oil Extends Rebound

U.S. heating oil futures have increased, approaching $2.20 per gallon, marking a significant rebound from the four-year low of $1.975 observed on May 7th. This price rise is driven by constrained supplies and enhanced demand prospects. The broader energy market has benefited from the recent 90-day tariff hiatus between the U.S. and China, which has alleviated global growth apprehensions. In April, China's crude oil imports soared by 7.5% year-over-year, indicating robust refinery operations and contributing to the reduction of global middle distillate inventories. Furthermore, the OPEC+ alliance's pledge to gradually increase output has not mitigated the tightness in the distillate market, despite ongoing voluntary production cuts and continuous supply disruptions in Libya, Venezuela, and Iraq. According to official data from the Energy Information Administration (EIA), total distillate stocks fell by 3.16 million barrels, countering forecasts for a slight increase, while heating oil inventories rose modestly by 290,000 barrels in the week ending May 9th.