FX.co ★ Heating Oil Rises Further After EIA

US heating oil futures climbed toward $2.60 per gallon after a much larger-than-expected drawdown in US distillate inventories added to already tight crude supplies and rising tensions in the Middle East, heightening near-term supply risks. According to the EIA, distillate stocks fell by 4.57 million barrels in the week ended February 13th, more than three times the forecast decline of 1.4 million barrels, while crude inventories dropped by 9.01 million barrels. The data highlight robust refinery demand and a limited buffer in fuel supplies. At the same time, crude feedstock costs rose to their highest level since August as US officials indicated Iran had failed to meet key conditions in nuclear talks and ongoing military activity near the Strait of Hormuz kept disruption risks elevated. Although milder weather and weaker natural gas prices may slightly curb heating demand, the magnitude of the inventory drawdowns and higher input costs has tightened the physical market balance and supported heating oil prices.