FX.co ★ Heating Oil Tracks Crude Lower

Heating oil futures in the United States declined to approximately $2.31 per gallon, following a peak of $2.39 mid-September, attributed to a reduction in crude feedstock costs and an increase in inventory levels. Oil prices softened as President Trump advocated for lower costs, indicating a preference for reduced oil prices over imposing additional sanctions on Russia, which alleviated immediate supply disruption concerns. Additionally, the Federal Reserve's decision to cut interest rates by 25 basis points, accompanied by guidance for potential further easing, might stimulate fuel demand in the long term. However, the market perceives this as indicative of heightened economic risks within one of the major oil-consuming nations. From a supply perspective, the data highlighted a bearish trend, with heating oil stockpiles rising by 0.67 million barrels for the week ending September 12th, marking the largest weekly increase since early September and the fourth consecutive rise. Moreover, distillate inventories surged by approximately 4.05 million barrels, aligning with the previous week's growth and underscoring the presence of ample supply.