Heating Oil Extends Losses

US heating oil futures fell below $4.80 per gallon, extending losses for a third consecutive session as prospects for increased fuel supplies weighed on prices. The IEA agreed to accelerate the release of remaining emergency oil stocks, including more than 20 million barrels of diesel. Meanwhile, Russia resumed diesel exports following a partial easing of restrictions, with a tanker carrying around 40,000 metric tons of diesel departing Primorsk for Morocco. These developments followed reports of a US proposal to ease sanctions on oil tankers linked to Russia's shadow fleet, potentially facilitating global oil flows. However, EIA data showed that US distillate inventories fell by 2.5 million barrels in the week ending October 9, remaining 12% below its five-year average, highlighting persistent supply tightness. Attacks on shipping near the Strait of Hormuz and renewed strikes on Russian refineries also continued to threaten global fuel supplies.

US heating oil futures fell to around $4.85 per gallon on Thursday, paring recent gains alongside crude prices as investors assessed a US proposal to ease sanctions on shadow fleet tankers to reduce shipping costs and facilitate oil flows. The discussions follow President Donald Trump's temporary easing of sanctions on Russian diesel exports last week, although analysts have questioned the deal's potential to lower fuel prices given the relatively small volume involved. Meanwhile, Russia accused Ukraine of attacking two oil refineries, including the 400,000-barrel-per-day Ryazan facility, raising doubts over the prospects for an energy truce announced by Trump. Continued attacks on shipping near the Strait of Hormuz also pose risks to global oil flows. Separately, API data showed that US distillate inventories fell by 1.5 million barrels in the week ended October 9, pointing to tighter supplies.

Heating oil futures in the US held above $4.90 per gallon, the highest in three weeks and close to last month's record high of $5.30, as unprecedented supply tightness returned to the market's forefront. Russia and Ukraine exchanged strikes against each other's power and gas facilities. The strikes erased already-dim expectations that the energy ceasefire touted by President Trump would hold, stoking fears of continued attacks on major Russian refineries. The developments also deepened doubts that Russia would release 36 million barrels of diesel for export, a pledge that faced skepticism upon announcement, as a domestic distillate shortage prompted the Moscow to halt exports last quarter. Meanwhile, attacks on vessels crossing the Persian Gulf kept tanker shipping costs near record highs and curtailed exports from the region. Shortages of crude oil for major refineries had already driven prices to a record high and prompted US officials to briefly consider an export ban.