FX.co ★ US Heating Oil Futures Rebound from 11-Week Low

US heating oil futures rose to $2.28 per gallon, recovering from an 11-week low of $2.24 recorded on October 3. This increase is attributed to ongoing concerns about limited distillate supplies as winter approaches, compounded by a smaller-than-anticipated production increase by OPEC+. The organization agreed to boost output by only 137,000 barrels per day in November, significantly below market expectations. Concurrently, the latest outlook from the EIA suggests that US distillate inventories will remain below average until 2026, influenced by robust exports, refinery shutdowns, and substantial stock drawdowns earlier this year. In the first half of 2025, inventories dipped by 17%, equating to approximately 22 million barrels. Additionally, demand for distillate fuel oil increased by 5%, while production of renewable diesel and biodiesel plunged 35% year-on-year. Looking forward, anticipated further refinery closures in Houston and California are expected to maintain tight supplies well into 2026.