Heating Oil Moves Toward Record

US heating oil futures rose to around $5 per gallon, moving closer to the record high touched in mid-September, after industry data showed a further inventory draw. API data showed that US distillate stocks fell by 2.6 million barrels in the week ending October 16, underscoring tight supplies. Morgan Stanley also warned that oil-product markets could remain tight through mid-2027, as planned refinery outages are expected to rise by 3.4 million barrels per day through Q2 2027, about 2.5 times the norm. Meanwhile, Middle East supply concerns persisted, despite Gulf oil flows remaining more resilient than feared. Traders also weighed the potential for increased Russian fuel exports after President Trump waived new Russia-related sanctions and tariffs. Secretary of State Marco Rubio said the administration could take up to 60 days to assess their economic impact, leaving uncertainty over whether the move would help ease global fuel supply pressures.

US heating oil futures traded around $4.90 per gallon, remaining within a relatively narrow range over the past week as investors assessed President Donald Trump's decision to waive key Russia-related sanctions and tariffs. The move could pave the way for increased Russian diesel exports, although Trump said he had yet to make a final decision on the measures, while Secretary of State Marco Rubio said officials would take up to 60 days to assess their economic impact. Meanwhile, supply risks remained elevated as attacks on commercial vessels disrupted shipments through the Persian Gulf, with crude flows falling to around 8.5 million barrels per day last week from more than 20 million barrels per day the previous week, according to Kpler. EIA data showed that US distillate inventories fell by 2.5 million barrels in the week ending October 9, leaving stocks 12% below their five-year average and highlighting persistent supply tightness.

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.