17.06.202516:30:31UTC+00Heating Oil Tracks Crude Higher

Heating oil futures surged to approximately $2.48 per gallon, marking the highest point since mid-February. This increase has been driven by the escalating costs of crude-oil feedstock due to the ongoing Iran-Israel tensions, which have significantly heightened production expenses. Refineries along the US Gulf Coast are grappling with steep premiums for light-sweet crude oils, following renewed strikes near Tehran and subsequent evacuation orders from President Trump. These developments have tightened distillate margins. Simultaneously, distillate inventories have plummeted to their lowest levels in several years, with US heating oil stocks reaching their lowest seasonal levels since 2014. This is occurring despite refineries operating at near full capacity to meet the strong demand for diesel and marine fuel. Additionally, tanker freight and insurance premiums have spiked due to Gulf region war-risk concerns, further pushing up delivery costs. On the demand front, robust diesel consumption across North America, coupled with a revival in European industrial activity—even amidst mild spring temperatures—has absorbed the limited distillate supply, maintaining elevated heating oil prices.