Heating Oil Falls Slightly

Heating oil futures were slightly down below $4 per gallon on Friday as hopes for an end to the U.S.-Iran conflict increased after Pakistani officials confirmed that Iran had sent an updated peace proposal. Still, prices remained near a four-year high as Middle East supply disruptions continued to tighten feedstock supply for refiners. 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. Heating oil posted its fourth consecutive monthly increase in April.

US heating oil futures rose toward $4.13 per gallon, 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. Heating oil posted its fourth consecutive monthly increase in April.

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.