FX.co ★ Heating Oil Rebounds After EIA Data

U.S. heating oil futures advanced to approximately $2.20 per gallon, recovering from a four-month low of $2.18 recorded on October 15th. This uptick was driven by a recent EIA weekly report that challenged the prevailing notion of abundant supply. Specifically, distillate stocks saw a significant reduction of 4.53 million barrels in the week ending October 10th, following a previous week’s decrease of 2.02 million barrels, pushing inventories further below the seasonal average. Additionally, heating-oil inventories decreased by approximately 4.0 million barrels, adding more pressure to the refined-product market. Nevertheless, crude oil stocks experienced a substantial increase of 3.52 million barrels, well above the forecasted 0.12 million-barrel rise, while global supply expectations continue to be strong due to expanding output from OPEC+ and non-OPEC countries. This robust production continues to exert downward pressure on crude prices, thereby limiting the rebound of heating oil.