Heating Oil Futures Move Higher

US heating oil futures rose above $4 per gallon on Thursday, partially recovering losses from the previous session, as investors weighed conflicting signals from the US and Iran over a potential end to the conflict. Tehran stated it has no intention of engaging in direct talks with Washington, emphasizing that mediated discussions do not constitute formal negotiations. By contrast, the White House maintains that peace talks are ongoing, while cautioning that military action could be intensified if Iran does not acknowledge its losses. Meanwhile, distillate inventories, including diesel and heating oil, rose by 3.0 million barrels in the week ending March 20, far exceeding analysts’ expectations of a 1.3 million-barrel draw and sharply reversing the prior week’s decline. Energy markets have been volatile since the start of the war, with heating oil prices up more than 50% this month due to supply disruptions in the Strait of Hormuz.

US heating oil futures dropped toward $3.95 per gallon on Wednesday as diplomatic efforts to resolve the Middle East conflict combined with a surprise build in domestic inventories to pressure energy markets. Distillate stocks including diesel and heating oil rose by 3.03 million barrels in the week ended March 20th defying analyst expectations for a 1.3 million-barrel draw and marking a sharp reversal from the previous week's decline. This inventory surge occurred alongside a 6.9 million-barrel increase in US crude stockpiles which surpassed forecasts and signaled a fifth consecutive weekly build. While the US reportedly delivered a 15-point peace proposal to Iran via Pakistan Tehran ruled out ceasefire talks despite allowing restricted transit through the Strait of Hormuz. Although energy markets remain volatile due to fuel hoarding in Asia the pullback in benchmark crude has provided a temporary ceiling for heating oil prices which remain up 50% for the month.

US heating oil futures dropped 10% to around $3.8 per gallon, reversing gains from the previous sessions, as hopes of a possible Middle East ceasefire eased concerns about further supply disruptions. President Donald Trump said the US is engaged in talks with Iran and has delivered a 15-point proposal to end the conflict, reiterating this even as Tehran denied any direct negotiations and indicated it has no intention of restoring normal shipping conditions in the Strait of Hormuz. However, uncertainty persists as the US increases its military presence in the region and explores measures to secure key oil transit routes. Energy markets have remained highly volatile since the conflict began, with the strait, which handles about one-fifth of global oil flows, still largely shut. Despite the pullback, US heating oil futures are still up more than 50% so far this month.