Heating oil futures in the US have declined to below $2.14 per gallon, reverting from a recent monthly high of $2.18 recorded on Stember 24th. This downturn comes as oil benchmarks are pressured by rising supply forecasts from Saudi Arabia and Libya. As the world’s leading oil exporter, Saudi Arabia has been adjusting its crude oil price target downwards in anticipation of a production increase, which has contributed to the declining prices.
In Libya, progress towards appointing a central bank governor has emerged from agreement among rival factions, a development that could alleviate the country’s oil revenue crisis and facilitate the resumption of exports. The latest rort from the EIA has further pressured heating oil prices by revealing a 191,000 barrel increase in inventories for the week ending Stember 20th, offsetting the prior week’s reductions.
Despite this inventory increase, declines in crude and distillate stockpiles of 4.741 million and 2.227 million barrels respectively, have helped to mitigate the drop in heating oil prices.
Since the start of 2024, heating oil prices have decreased by $0.36/gallon or 14.42%, as tracked by a contract for difference (CFD) linked to the market benchmark. Analysts forecast an anticipated price of $2.30/gallon by the end of this quarter, with expectations for the price to rise to $2.36 over the next 12 months.