Heating oil futures experienced a decrease, settling at approximately $2.25 per gallon, down from the two-month peak of $2.45 reached on September 26th. This decline coincided with a surge in supply signals and reduced crude oil prices, alleviating recent market pressures. OPEC's output surged by 400,000 barrels per day in September, with Saudi Arabia increasing its production by around 320,000 barrels per day to nearly 9.98 million barrels per day. This escalation in production contributed to enhanced crude oil availability in the short term, thereby reducing the pressure on feedstock supply for refiners.
According to the Energy Information Administration's (EIA) weekly report for the period ending September 26th, there was an unexpected increase in distillate inventories, which grew by 578,000 barrels contrary to market forecasts of a 1.0 million-barrel decline. Additionally, heating oil stockpiles rose by 112,600 barrels. U.S. commercial crude inventories also expanded by approximately 1.79 million barrels, while refinery runs declined by 308,000 barrels per day to 16.2 million barrels per day, with utilization dipping to 91.4%. This data suggests a downturn in domestic demand or a reduction in exports, rather than an increase in refinery output.
