FX.co ★ Heating Oil Falls to August Low

US heating oil futures continued to decline, trading near $4.18 per gallon and marking their lowest level since late August. The drop was driven in part by expectations of renewed diplomatic efforts in the Middle East. Comments by President Donald Trump that large-scale strikes on Iran were "highly unlikely" helped ease fears of fresh attacks on Tehran, tempering some of the geopolitical risk premium.

Even so, supply risks remain elevated amid ongoing regional hostilities. At the same time, Ukraine has stepped up attacks on Russian energy infrastructure, targeting facilities such as the Kirishi plant, Russia’s second-largest refinery. These strikes threaten Russian gasoline and diesel output and cast doubt on the reported understanding between Presidents Putin and Trump regarding Russian diesel exports to global markets.

In the US, data from the Energy Information Administration (EIA) showed that distillate inventories—covering diesel and heating oil—fell by 3.6 million barrels in the week ended October 30. Stockpiles now sit about 13% below the five-year average, underscoring ongoing tightness in supply.