FX.co ★ Heating Oil Extends Rebound

Heating oil futures in the United States have climbed to over $2.30 per gallon, after hitting a three-month low of $2.16 on March 13th. This increase is attributed to a continuous decrease in inventories and rising costs of raw materials. According to the latest data from the Energy Information Administration (EIA), U.S. distillate stocks saw a reduction of 421,000 barrels in the week ending March 21st, following a significant 2.8-million-barrel decline in the prior week. Additionally, heating oil inventories also experienced a decrease of 35,000 barrels. Concurrently, the price of crude oil has reached its highest in nearly four weeks due to tightening global supply, which in turn has escalated production costs for refineries, particularly those dependent on sour crude imports from Canada. Furthermore, tariffs on Canadian crude imports are exacerbating these increased feedstock costs, contributing to the upward trend in heating oil prices.