FX.co ★ Heating Oil Eases from 2-Week Highs

Heating oil futures have edged back to approximately $2.40 per gallon, following a peak of $2.43 on July 8th—a high not seen in two weeks. This decline is largely attributed to an unexpected increase in both crude oil and middle-distillate inventories, which has exerted downward pressure on feedstock costs. In the week leading up to July 4th, U.S. crude stocks rose by 7.07 million barrels, marking the most significant increase since January. During the same period, the previous week's drawdown in distillate inventories of 1.71 million barrels diminished to 825,000 barrels. Additionally, heating oil stocks shifted from a decrease of 202,000 barrels to a gain of 603,000 barrels. Despite these developments, crude oil prices have maintained their recent upward momentum, curbing the decline in heating oil prices. The convergence of refiners channeling more barrels into storage, forecasts of unseasonably warm weather that dampens summer consumption, and a robust global supply exerting pressure on feedstock costs has collectively contributed to the downward trend in heating oil prices.