08.04.202614:48:05UTC+00Heating Oil Crashes After Ceasefire

Heating oil futures tumbled roughly 14% to around $3.80 per gallon on Wednesday after a diplomatic breakthrough between the United States and Iran sharply reduced the geopolitical risk premium. Prices fell back when President Trump postponed planned military strikes for two weeks under a conditional ceasefire that permitted the temporary reopening of the Strait of Hormuz. This de-escalation outweighed a surprisingly bullish EIA report showing that distillate inventories declined by more than 3.1 million barrels—over twice the expected draw. At the same time, crude oil stocks increased by 3.08 million barrels, against forecasts for a 0.7 million barrel build, while heating oil inventories edged up by 233,000 barrels. Traders also tracked reports of a drone attack on Saudi Arabia’s East–West pipeline, a key alternative export route to the Red Sea. Despite this localized disruption, the steep sell-off across energy benchmarks has helped ease broader concerns over global supply constraints and inflationary pressures.