FX.co ★ Heating Oil Near 6-Month Lows

US heating oil futures have declined to approximately $2.12 per gallon, reaching nearly six-month lows. This downturn can be attributed to forecasts predicting warmer weather, which reduces short-term demand, alongside the consideration of geopolitical risks. Projections suggest above-normal temperatures across a significant portion of the eastern two-thirds of the US continuing through mid-January, with this warming trend moving northward. This scenario leads to decreased heating requirements during a period that usually experiences peak consumption. Concurrently, traders are evaluating the implications of recent US measures concerning Venezuela on the global energy supply. Although Venezuela is home to significant oil reserves, its currently limited contribution to worldwide output suggests that any potential production disruptions are unlikely to significantly affect refined fuel markets in the immediate future.