FX.co ★ Heating Oil Down Over 2%

U.S. heating oil futures decreased by over 2% to approximately $2.22 per gallon on Thursday, retracting from a five-week high. This decline was in response to a drop in crude benchmarks, influenced by a decrease in geopolitical risk premiums. President Trump’s statements indicated a reduction in tensions, as Iran's crackdown on anti-government protests seemed to have subsided, and there were no immediate plans for large-scale executions. This alleviated fears of potential U.S. military intervention that could disrupt energy supply across the sector. Meanwhile, the Energy Information Administration (EIA) reported a significant reduction in heating oil inventories, with a drawdown of about 745,000 barrels last week—the largest in several months—highlighting a tighter supply in the near future. Nonetheless, the impact on prices remains constrained due to the overall abundance of crude and distillate supplies, alongside unseasonably warm temperatures across the eastern United States, which continue to dampen traditional demand levels. U.S. crude inventories climbed by 3.39 million barrels, and distillate stocks showed only a minor decrease of approximately 29,000 barrels, falling short of market forecasts.