Heating Oil Futures Rise

US heating oil futures rose nearly 3% toward $3.60 per gallon in early June, paring recent losses amid lingering uncertainty over a potential US–Iran peace deal that could ease supply constraints. The two sides were reportedly proposing adjustments to a draft deal to extend a ceasefire and restore access through the Strait of Hormuz, though meaningful progress remained unclear. Adding to uncertainty, tensions in Lebanon escalated, with Israeli advances and Hezbollah clashes raising spillover risks. Distillate exports from the region have been heavily disrupted since the conflict began in March, straining refinery operations and pushing heating oil futures to a record $4.60 per gallon that month. Reflecting tight supply conditions, US distillate inventories, including diesel and heating oil, fell by 2.107 million barrels in the week ended May 22, larger than the expected 1 million barrel decline.

US heating oil futures traded around $3.50 per gallon, hovering near their lowest level in more than five weeks, on expectations of easing supply constraints after reports indicated that Iran and the US had agreed to a truce. The two sides reportedly reached a 60-day memorandum that would extend the existing ceasefire and support the resumption of crude oil and refined product exports through the Strait of Hormuz within a month. Distillate product exports from the region have been heavily disrupted since the conflict erupted in March, putting pressure on refinery operations and driving heating oil futures to a record high of $4.60 per gallon that month. Reflecting tight supply conditions, US distillate inventories, including diesel and heating oil, fell by 2.107 million barrels in the week ending May 22, a larger-than-expected draw compared with forecasts of a 1 million barrel decline. In May, heating oil futures declined about 14%.

Heating Oil decreased 5.08% to 3.5258 USD/Gal