03.04.202514:49:31UTC+00Heating Oil Near 3-Month Lows

U.S. heating oil futures have dipped below $2.20 per gallon, approaching the three-month low of $2.16 seen on March 13. This decline mirrors a drop in crude oil prices, fueled by expectations of strong supply and reduced demand. The cost of crude oil has decreased significantly after OPEC+ unexpectedly increased production by 411,000 barrels per day, which is substantially higher than previously planned increments. This comes as U.S. crude inventories swelled by 6.2 million barrels, countering predictions for a 2-million-barrel decrease and indicating a plentiful supply. Moreover, the implementation of a 10% tariff on all U.S. imports by former President Trump has exacerbated recession concerns, potentially hindering industrial activities and consumer spending, which in turn could dampen energy demand across the board. With the onset of milder temperatures, heating oil consumption is seasonally declining, reducing heating needs in both residential and commercial spaces. Additionally, the latest report from the Energy Information Administration (EIA) indicated an increase of 0.264 million barrels in distillate stockpiles last week, defying expectations of a 1.1 million barrel decrease.