Heating Oil Rises to Two-Week High

US heating oil futures climbed over 2% toward $4.10 per gallon in late April, hitting a two-week high, as ongoing Middle East supply disruptions continued to constrain feedstock availability for refiners. Reports indicated that President Trump directed aides to prepare for an extended blockade of Iran, heightening the risk of further disruption in the Strait of Hormuz. Although a ceasefire has been in place since early April, it has been repeatedly strained by ongoing tensions, with traders awaiting developments in potential negotiations. With the key passageway largely inaccessible, vessel traffic through the route has dropped to near zero, disrupting a vital corridor that typically carries around 20 million barrels per day of oil and refined products. Against this backdrop, API data showed that distillate stockpiles, including diesel and heating oil, fell by 2.60 million barrels last week. For the month, heating oil remained on track for its first loss in four months.

US heating oil futures climbed above $4.0 per gallon in late April, as prolonged Middle East supply disruptions tightened availability for refiners. Although a ceasefire has been in place since early April, it has been repeatedly strained by ongoing tensions, with traders weighing the next steps toward peace talks as the US discusses a proposal from Tehran. The main focus remained on the crucial Strait of Hormuz, which has become largely impassable, with vessel movements through the route dropping to nearly zero, disrupting a vital corridor that typically carries around 20 million barrels per day of oil and refined products. Markets note that a sustained closure of the passage could force oil demand lower to align with supply already reduced by at least 10%. For the month, heating oil is on track for its first loss in four months.

US heating oil futures rose to above $4.0 per barrel in April, gaining more than 18% this week and reaching a two-week high amid tightening supply conditions for refiners, driven by the prolonged Middle East war. The US and Iran remained in a standoff over the Strait of Hormuz after failing to resume peace talks, with Washington maintaining a naval blockade on vessels traveling to and from Iranian ports. Since the blockade began, US forces have intercepted and boarded ships while turning back dozens attempting to enter Iranian waters. Iran has also restricted passage through the strait, with reports of gunfire involving commercial vessels this week. The escalating tensions have reduced oil flows from major Persian Gulf producers, as the chokepoint accounts for roughly a quarter of global seaborne oil trade. Meanwhile, EIA data showed that distillate stocks, including diesel and heating oil, fell by 3.4 million barrels last week, exceeding expectations for a 2.5 million-barrel draw.