FX.co ★ Heating Oil Rises to 2-Month High

US heating oil futures climbed above $4.00 per gallon, reaching a two-month high, as escalating tensions in the Middle East intensified concerns over global refined fuel supplies. The breakdown of the US-Iran truce and renewed tanker attacks in the Strait of Hormuz stoked fears of disruptions to fuel shipments from the Persian Gulf, while Ukrainian strikes on Russia’s largest refineries continued to constrain diesel exports. Seasonal refinery maintenance, combined with years of refinery closures in the US and Europe, further tightened the supply outlook. This constrained backdrop drove US refining margins to record levels, with the diesel crack spread rising above $91 per barrel. Although distillate fuel inventories increased by 4.6 million barrels in the week ending July 19, EIA data showed that stockpiles remained well below their five-year seasonal average.