FX.co ★ Heating Oil Failed to Hold to Near 2-Year High

US heating oil futures fell toward $2.60 per gallon on Friday, pulling back from their April 2024 highs as a record surge in domestic inventories finally outweighed geopolitical risk premiums. The selloff intensified after the EIA reported a 15.99 million-barrel jump in US crude stocks, the largest weekly build in three years.

Prices had initially found support from heightened tensions in the Middle East and an unseasonably late winter storm in the Northeast, but the scale of the oversupply ultimately undermined that strength. Even ongoing nuclear negotiations in Geneva and a robust 4% increase in four-week fuel demand were not enough to offset the pressure from swelling stockpiles.

Attention is now turning to the upcoming OPEC+ meeting, where any decision not to postpone planned production increases could drive futures even deeper into negative territory. For now, despite elevated volatility and lingering concerns over potential disruptions to global flows through the Strait of Hormuz, traders are clearly prioritizing the bearish signal from the supply data.