FX.co ★ Heating Oil Rises After EIA

Heating oil futures in the United States climbed to approximately $2.35 per gallon as physical supplies diminished and demand pressures outpaced the capacity of refiners. According to data from the Energy Information Administration (EIA), distillate inventories shifted from a 4.046 million barrel increase in the previous week to a 1.685 million barrel decrease for the week ending September 19th. This represents an approximate 5.7 million barrel shift, indicating significant tightness in the distillate pool on which heating oil depends. Concurrently, U.S. crude oil stocks decreased by around 0.61 million barrels, and heating oil inventories recorded their first decline in five weeks, dropping about 189 thousand barrels following a 0.67 million barrel increase the week before. The robust export of distillates has been depleting domestic storage more rapidly than refiners can replenish it. Additionally, limitations in refinery throughput, configuration, and seasonal maintenance factors have restricted the immediate capacity to increase distillate yields from crude oil.