Heating Oil Futures Halt 4-Day Rally
US heating oil futures fell more than 4% to $2.55 per gallon, pulling back from a four-day rally of 12.4% that pushed prices to a 10-week high of $2.67, as markets judged that peak US cold has passed and inventories unexpectedly increased. Distillate stockpiles, including diesel and heating oil, rose by 329 thousand barrels against expectations for a 0.55 million barrel draw, while heating oil inventories increased by 26 thousand barrels after a larger build the prior week. Weather forecasts show slightly colder conditions in the eastern US during the first week of February but a warming trend in northern regions thereafter, according to Commodity Weather Group. Despite the pullback, heating oil futures remain more than 20% higher so far in January, supported by earlier cold driven demand, refinery disruptions, and increased fuel oil use for power generation as electricity demand surged and high natural gas prices encouraged fuel switching.