US Heating Oil Futures Rise to 3-Week High

Heating oil futures in the US rose above $4.1 per gallon, moving closer to an almost six-week high, amid heightened concerns over prolonged supply disruptions in the Middle East. President Donald Trump continued to adopt a tougher stance toward Tehran as talks between Washington and Iran remained stalled, keeping the Strait of Hormuz largely shut. Concerns deepened further after reports emerged that energy facilities in the Persian Gulf were struck over the weekend. Shipments of refined fuel products from the region have been severely disrupted since the conflict began in March, tightening refinery supplies and driving heating oil futures to a record high of $4.6 per gallon. Meanwhile, recent EIA data showed US distillate fuel inventories unexpectedly rose in early May while gasoline stockpiles declined, suggesting refineries prioritized diesel and jet fuel output amid tight global transportation fuel supplies.

Heating oil futures for delivery at the New York Harbor climbed toward $4.0 per gallon, recouping losses from a two-day decline amid heightened concerns over longer supply disruptions in the Middle East. The rebound followed President Donald Trump’s more hardline stance toward Tehran, saying he would no longer wait on Iran and urging its leadership to reach a deal with the US. Exports of distilled products from the region have been largely halted since the start of the war in March, straining refineries and pushing heating oil futures to a record high of $4.6 during the month. Meanwhile, earlier this week, data from the EIA showed US distillate fuel stocks rose by 200,000 barrels in the first week of May, contrary to expectations for a 2.8 million barrel draw. The report also contrasted with a 4.1 million barrel decline in gasoline inventories, suggesting refineries prioritized diesel and jet fuel output amid tight global transportation supply conditions.

Heating oil futures for delivery at the New York Harbor eased to $3.90 per gallon from the six-week high of $4.16, as some respite in stock levels momentarily weighed against tight supply across the globe. Data from the EIA showed that stocks of distillate fuel in the US inched higher by 200 thousand barrels in the first week of May, contrasting with bets of a 2.8 million draw. The data also contrasted with a 4.1 million barrel draw for gasoline, indicating that refineries opted to concentrate capacity in diesel and jet fuel due to the shortages in global transportation hubs. Still, supply remained tight as the escalatory remarks between the US and Iran prolonged expectations of the suspension in energy exports from the Middle East. The export of distilled products from the region has been all but halted since the start of the war in March, stressing refineries and driving the price of heating oil futures to a record high of $4.6 in March.