2026.01.0715:47:19UTC+00Heating Oil Drops to 7-Month Low

U.S. heating oil futures have declined to approximately $2.06 per gallon, reaching their lowest level in seven months. This downturn is attributed to unexpectedly large inventory increases and forecasts of milder weather, both of which are dampening immediate demand and heightening concerns about surplus supply. According to the Energy Information Administration (EIA), U.S. distillate stockpiles increased by 5.59 million barrels for the week ending January 2nd, significantly exceeding the anticipated rise of 2.2 million barrels and marking the eighth straight week of gains. This trend suggests a robustly supplied market. Concurrently, weather forecasts indicate above-average temperatures will prevail across a majority of the eastern U.S. through mid-January. This warmer weather is expected to reduce heating demand during what is traditionally a period of high consumption. Additionally, market participants are monitoring developments on the supply front, such as President Donald Trump's announcement that Venezuela might ship between 30 and 50 million barrels of crude oil to the U.S., which could further augment the supply for the world’s largest oil consumer.