New York, Jan 21, 2026, 07:37 EST — Premarket
- NYMEX ULSD (heating oil) March futures climbed roughly 2% in early trading
- Traders flagged the risk of colder U.S. weather and noted a broader rebound in energy contracts
- Attention shifts to U.S. distillate inventory figures following a holiday postponement
U.S. heating oil futures rose in early Wednesday trading, gaining ground faster than crude amid bets on colder weather and new inventory data. NYMEX ULSD March contracts climbed 4.66 cents to $2.3443 a gallon. At the same time, WTI crude inched up 18 cents, reaching $60.54 a barrel.
This shift is crucial since ULSD serves as the primary U.S. diesel benchmark and a stand-in for heating oil used in homes, particularly across the Northeast. During mid-winter, even minor changes in temperature or supply can rapidly alter demand for distillates — both diesel and heating oil.
This week, with fewer government reports on the calendar, traders have less data to rely on daily. That often means sharper market moves triggered by weather developments and refinery news.
Overnight, crude dragged markets lower as oil prices slipped amid concerns over a likely build in U.S. crude inventories, a brief shutdown at two major Kazakh fields, and fresh tariff-driven geopolitical strains. “The oil output halt … is temporary,” said IG analyst Tony Sycamore, noting that the anticipated rise in U.S. crude stocks alongside geopolitical risks will continue to weigh on the market. Reuters
Weather adds another layer of complexity. Forecasters say a major winter storm might dump heavy snow, sleet, and freezing rain over parts of the southern U.S. from later this week through the weekend. That kind of setup tends to shake up demand forecasts for heating fuels and electricity.
Natural gas traders are moving fast. Tom Kloza warned that the heating oil and natural gas markets face “the toughest test … in a decade,” as forecasts now point to much colder weather across the Northeast and Midwest. MarketWatch
The heating oil rally has its boundaries, and the market is well aware. A shift to warmer forecasts or a storm veering away from key population hubs can quickly drain demand.
Traders are eyeing the U.S. Energy Information Administration’s weekly petroleum status report, set for release Thursday at 12:00 p.m. EST, pushed back due to the Martin Luther King Jr. Day holiday week. This report covers distillate inventories and refinery runs, the key figures linked to heating oil and diesel supply.
