Heating Oil Rises for Third Session

US heating oil futures rose above $3.70 per gallon in early June, advancing for a third consecutive session, as reports of fresh hostilities in the Middle East dashed hopes of a breakthrough in US–Iran negotiations. Both countries carried out new strikes, even as President Donald Trump said Washington remained in talks with Iran on a possible deal to end the conflict, pushing back against Iranian media claims that communications had collapsed. Conflicting reports and ongoing strikes have kept markets on edge, driving volatility in energy commodities. Distillate exports from the region have been significantly disrupted since the conflict began in March, straining refinery operations and pushing heating oil futures to a record $4.60 per gallon that month. Against this backdrop, industry data showed that diesel and heating oil inventories fell by 214 thousand barrels in the final week of May.

US heating oil futures rose to above $3.70 per gallon in early June, extending recent gains, as markets continued to assess developments in US–Iran negotiations. Reports indicated that Iran had suspended indirect engagements with Washington over Israel’s operations in Lebanon, contrasting with President Donald Trump’s statement that talks with the US were still ongoing. The differing accounts have kept markets on edge and energy commodities volatile. Distillate exports from the region have been significantly disrupted since the conflict began in March, straining refinery operations and driving heating oil futures to a record $4.60 per gallon that month. Reflecting continued supply tightness, US distillate inventories, including diesel and heating oil, fell by more than 2.0 million barrels in the week ended May 22, larger than expectations for a 1 million-barrel draw.

US heating oil futures rose nearly 4% to above $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.