Heating Oil Rises to 3-Week High

US heating oil futures rose above $4.20 per gallon in late April, the highest level in over three weeks, as worsening supply disruptions in the Middle East kept feedstock availability for refiners constrained. The US and Iran remain locked in a standoff, with neither side willing to adjust its conditions for an agreement, keeping reciprocal naval restrictions that continue to block oil and product tanker movements through the Strait of Hormuz. Shipping through the key waterway has been largely suspended since early March, affecting around 20 million barrels per day of crude and refined product flows. Consequently, EIA data showed that distillate stockpiles, including diesel and heating oil, fell by 4.5 million barrels last week. Meanwhile, seasonal outlooks point to above-normal temperatures, which could curb heating demand as the US moves into warmer months. For the month, heating oil is on track for a fourth straight monthly increase.

US heating oil futures held above $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, EIA data showed that distillate stockpiles, including diesel and heating oil, fell by 4.494 million barrels to 103.6 million, exceeding expectations for a 2.2 million barrel draw.

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.