FX.co ★ Heating Oil Rises to 1-Week High

In July, heating oil futures surged past $2.36 per gallon, reaching a one-week high driven by tightening distillate inventories and escalating crude feedstock costs. Data from the U.S. Energy Information Administration (EIA) for the week ending June 27th indicated a significant reduction of 1.71 million barrels in total distillate inventories, surpassing the anticipated 1.25 million barrels, alongside an additional decrease of 202,000 barrels in heating oil stocks. These declines have left stock levels at multi-year lows. Refinery operations increased to approximately 95% capacity as producers strove to meet the robust demand for summer diesel blends and strong marine fuel exports, consequently depleting available supplies. On the demand front, highway diesel consumption in North America picked up pace ahead of the peak travel season, while European refiners increased their distillate shipments to global shipping markets. These factors collectively bolstered heating oil futures, despite the easing of geopolitical risk premiums.