NEW YORK, Jan 16, 2026, 07:11 EST — Premarket
- NYMEX heating oil futures edged higher in early U.S. trading on Friday.
- U.S. data revealed distillate supplies are tracking below typical seasonal levels.
- Forecasters are now pointing to a chillier late January for some areas in the Northeast.
NYMEX February ULSD, the key heating oil contract, gained 3.1 cents, climbing roughly 1.4% to $2.2392 a gallon in early Friday trading. WTI crude added 76 cents to settle at $59.84 a barrel, with Brent crude up 81 cents, reaching $64.57. 1
The move matters now because winter demand can squeeze distillate fuels — the barrel covering diesel and heating oil — quicker than refiners can adjust. Prices remain jittery with each forecast update and inventory report.
Heating oil futures track ultra-low sulfur diesel (ULSD), the main diesel grade in the U.S. During cold spells in the Northeast, the distillate supply must cover both home heating and trucking demand simultaneously.
The U.S. Energy Information Administration reported distillate fuel inventories dipped last week, sitting roughly 4% below the five-year average for this period. Refineries operated at 95.3% capacity. Crude oil stocks climbed by 3.4 million barrels, reaching 422.4 million, while gasoline inventories increased by 9.0 million, the agency said. 2
Government forecasters highlighted a cold snap risk for late January. The Climate Prediction Center’s week-two hazards outlook points to a “slight risk” of temperatures well below normal in parts of the Northeast from Jan. 23 to 29. 3
Private forecasters are aligned on the outlook. AccuWeather’s lead long-range meteorologist Paul Pastelok warned that “the jet stream will develop a large buckle,” with “very cold air building back again” in Canada — a pattern likely to send repeated blasts of cold into the Midwest and Northeast. 4
Heating oil usually follows crude on major moves, but winter often disrupts that pattern when distillate supplies tighten. Traders focus closely on how quickly refiners boost diesel output without oversupplying gasoline.
Supply can still catch the market off guard. “Gasoline builds are normal for this winter, but the speed at which they’re happening is unusually fast,” said senior DTN analyst Karim Bastati. He highlighted robust refining activity, despite distillates staying in focus. 5
But the gains can vanish fast. Should temperatures ease or refinery runs hover around the mid-90% mark, distillate inventories may swell again, putting a ceiling on ULSD—particularly if crude prices slide amid weaker risk appetite.
Coming next is the EIA’s weekly petroleum report for Jan. 22, pushed back due to the federal shutdown on Jan. 19. Traders will keep an eye on daily temperature forecasts through late January as well. 6
