FX.co ★ Heating Oil Tracks Crude Lower

U.S. heating oil futures have fallen to just over $2.11 per gallon, approaching the nearly three-year low of $2.00 per gallon recorded on April 8th. This decline follows a reduction in crude feedstock costs amid indications of easing tensions between the U.S. and Iran, potentially allowing Iranian oil to return to the global markets. Negotiators have reported making "very good progress" in formulating a nuclear deal framework, even as the U.S. imposed fresh sanctions on a Chinese refinery for processing Iranian oil. Simultaneously, concerns continue over the impact of U.S. tariffs on economic growth, underscored by a survey indicating nearly a 50% probability of a recession within the next year, which has dampened the outlook for demand. Nevertheless, the latest report from the Energy Information Administration showed a significant 1.85 million-barrel reduction in U.S. distillate stocks for the week ending April 11th—exceeding the anticipated 1.2 million-barrel decrease—while heating oil inventories remained unchanged for the second week in a row.