Heating Oil Futures Slip

Heating oil futures in the US slipped to around $4.0 per gallon, giving back gains from the previous session, after the US called off a planned strike on Iran, easing concerns over an imminent escalation that could further disrupt global energy exports. However, uncertainty remains elevated as earlier talks have failed to yield meaningful progress, while the Strait of Hormuz remains effectively disrupted. Regional shipping flows have been halted since the conflict began in March, tightening global refinery supply conditions and helping propel heating oil futures to a recent peak of $4.6 per gallon. Meanwhile, the International Energy Agency has recently warned that refinery throughput is expected to decline in Q2, while distillate markets remain extremely tight, with diesel and heating oil refining margins staying historically elevated, supported in part by strong transportation fuel demand.

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.