FX.co ★ Heating Oil Eases

Heating oil futures have eased slightly to below $2.49 per gallon, retreating from their six-month high of $2.52 reached on June 17th. This decline halts the recent upward trend spurred by the ongoing tensions between Israel and Iran. Despite these geopolitical concerns and a significant reduction in US crude inventories—an 11.47 million-barrel drop for the week ending June 13th, marking the largest decrease in a year—feedstock costs remain pressured. While distillate inventories have increased by 514,000 barrels, the impact of war-risk surcharges on tanker freight and insurance has steadied. Refiners are operating nearly at full capacity to satisfy strong diesel and marine-fuel demand. Nevertheless, the typically weaker heating demand in summer limits potential price gains, and substantial global supply—bolstered by rising OPEC+ output and record-high US production—continues to exert downward pressure on prices.