04.11.202516:22:43UTC+00Heating Oil Holds Near July Highs

US heating oil futures continue to hover above $2.41 per gallon, nearing the heights last seen in July, driven by shrinking distillate supplies that outweigh the declining costs of crude feedstock. During the initial half of 2025, inventories plummeted approximately 17%, leading to compressed refining margins. This compelled refiners to prioritize the production of gasoline and jet fuel, even as trade frictions and customs delays extended supplier lead times and curtailed the volumes available. As winter approaches, seasonal demand is depleting stockpiles faster than they can be replenished, especially in colder areas, which is buoying immediate prices. Nevertheless, the recent dip in crude prices has limited this upward momentum, as the market remains cautious about a potential surplus in 2026. OPEC+ has announced a slight production increase set for December but halted further expansions from January through March. Despite these dynamics, the risk of supply constraints remains elevated due to stricter sanctions against major Russian producers and ongoing attacks on energy infrastructure.