FX.co ★ Heating Oil Near 4-Year Lows

U.S. heating oil futures have declined to below $2 per gallon, nearing the four-year low of $1.977 observed on May 5th. This decline comes as energy markets remain under strain due to ongoing supply-demand disparities. The decision by OPEC+ to boost production by 411,000 barrels per day in June mirrors the increase in May, resulting in an excess of over 800,000 barrels per day across two months. This rise in output has intensified concerns of oversupply, especially as President Trump's tariffs amplify apprehensions about a global economic downturn, which could potentially suppress fuel demand. Adding to the pressure on prices, U.S. distillate fuel inventories decreased by 1.11 million barrels in the week ending May 2nd, falling short of the anticipated 1.4 million-barrel reduction. Concurrently, heating oil stocks increased by 123,000 barrels, marking a second consecutive week of inventory growth.