US Heating Oil Falls on Emergency Supply Release

Heating oil prices in the US fell toward $4.80 a gallon as the Trump administration moved to release emergency fuel supplies to ease rising costs ahead of the midterm elections. The Energy Department announced plans to loan 315,000 barrels from the 1 million-barrel Northeast Home Heating Oil Reserve, with deliveries expected to be completed by November 13. Energy Secretary Chris Wright described the move as a temporary response to supply disruptions. Around 4% of US households rely on heating oil, particularly in northeastern states, although the release is unlikely to materially affect the broader diesel market, given that the East Coast consumes approximately 1.2 million barrels of diesel and other distillates daily. Also, EIA data showed distillate inventories rose by almost 2 million barrels last week, offering some relief to markets strained by tight supplies as winter approaches.

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.