FX.co ★ US Heating Oil Futures Fall Toward 4-Month Low

US heating oil futures have decreased to $2.211 per gallon, nearing a four-month low, as they follow broader trends of decline in crude markets. This trend is attributed to ample global supply and renewed US-China trade tensions that have put pressure on energy markets. The International Energy Agency has increased its forecast for global oil supply growth to 3 million barrels per day for this year and 2.4 million barrels per day in 2026. This adjustment follows an increase in OPEC+ output and robust production levels from the Americas. Simultaneously, the agency has revised down its demand growth estimates to approximately 700,000 barrels per day for both years. This bearish outlook, coupled with renewed geopolitical tensions and diminished risk sentiment, has led to a decline in prices. However, the US Energy Information Administration has projected that distillate inventories will remain below average until 2026, owing to strong exports, refinery closures, and significant stock draws from earlier this year. Consequently, inventories fell by 17%, equivalent to approximately 22 million barrels, in the first half of 2025.