FX.co ★ Heating Oil Hits 4-Month Low

US heating oil futures declined to approximately $2.16 per gallon, marking a four-month low, as the drop in crude oil feedstock costs overshadowed support from a constrained distillate market. Crude inventories increased by 3.52 million barrels for the week ending October 10, significantly exceeding the 0.12 million-barrel consensus forecast, raising concerns about muted demand amid ongoing trade tensions between the US and China. Additionally, global supply forecasts remain strong, with OPEC+ and non-OPEC production continuing to expand, exerting downward pressure on crude prices. Nevertheless, heating oil outperformed most oil benchmarks, as the most recent EIA weekly report challenged the narrative of plentiful supply. Distillate stocks decreased by 4.53 million barrels, following a 2.02 million-barrel decline the previous week, leaving inventories significantly below the seasonal average. Heating oil inventories also fell by about 4.0 million barrels, further stressing the refined-product market.