New York, Jan 15, 2026, 07:36 EST — Premarket
- NY Harbor ULSD (heating oil) futures dropped roughly 3% early on, mirroring weakness in the energy sector.
- U.S. distillate stockpiles held steady at 129.2 million barrels, though inventories on the East Coast saw a decline.
- Attention now turns to the Jan. 22 U.S. government inventory report and any changes in crude supply risks.
Heating oil prices slipped in early Thursday trading, retreating from gains made earlier this week as traders balanced firm U.S. distillate inventories with mixed signals from crude markets. (CME Group)
This shift is crucial as the U.S. faces peak winter demand, with heating oil and diesel pulling from the same supply. Any squeeze in distillates can quickly push up delivery costs in the Northeast and boost prices for transport fuel.
Distillate refers to the industry’s category for middle fuels, primarily diesel and heating oil. The government further divides inventories by “PADDs,” regional zones that help monitor supply and demand changes.
NY Harbor ULSD futures (HOH6) slipped to around $2.20 a gallon, dropping close to 7 cents, or about 3%, in delayed CME data. (CME Group)
U.S. distillate fuel oil inventories held steady at 129.2 million barrels in the latest weekly report, barely shifting from the previous week. East Coast supplies dipped by 0.7 million barrels to 32.2 million, according to EIA data. The agency noted these distillate stocks remain roughly 4% below the five-year average for this season. (U.S. Energy Information Administration)
Refineries pushed output, running at 95.3% capacity, yet distillate production slipped slightly to roughly 5.3 million barrels per day, according to the EIA. Distillate product supplied, which tracks demand, averaged 3.7 million bpd over the last four weeks—up 2.2% compared to the same period a year ago. (EIA)
Heating oil usually moves with crude, which lately has been swayed by geopolitical tensions and inventory updates. “Oil prices have already priced in quite a bit of geopolitical risk premium over the last few days,” said Suvro Sarkar, energy analyst at DBS Bank, as markets kept an eye on Iran-related risks and rising U.S. stockpiles. (Reuters)
A downside risk remains. Should U.S. product inventories continue to climb and winter weather remain mild, heating oil could face sustained pressure despite stocks sitting below seasonal norms, particularly as refineries operate close to full capacity.
Gasoline, included in the same refinery slate, is facing a sizable inventory build that’s throwing a wrench into the refined products market. “Gasoline builds are typical for the current winter season, but their pace has been unusually high,” said senior DTN analyst Karim Bastati. (DTN PF)
The next key event comes with the Weekly Petroleum Status Report on Jan. 22. Traders will be watching closely to see if East Coast distillate draws continue and if refinery runs remain high. (U.S. Energy Information Administration)
