New York, Feb 20, 2026, 14:02 EST — Regular session
Heating oil futures in the U.S. slipped on Friday, giving up a portion of Thursday’s gains as crude prices hovered close to six-month peaks. The March NY Harbor ULSD contract dropped 2.2 cents, or 0.8%, settling at $2.59 per gallon. April contracts slid roughly 1% to $2.48. That keeps the front months trading above later ones—traders call this “backwardation,” and it typically points to a tight supply in the near term. Google
Heating oil prices don’t just sway the futures market—they tend to push diesel costs, too, and that ends up affecting freight rates and what people pay to heat their homes in winter.
Oil prices drifted as traders kept an eye on the U.S.-Iran standoff. Brent slipped 19 cents to $71.47 per barrel, while U.S. WTI eased 14 cents to $66.29, according to Reuters data. Both benchmarks, though, remained up roughly 5.3% for the week. Phil Flynn at Price Futures Group said the market was “caught in between” expectation and skepticism about a potential U.S. action on Iran. Saxo Bank’s Ole Hansen described it as a “wait-and-see day.” Reuters
The Energy Information Administration said Thursday that distillate inventories, which include diesel and heating oil, dropped by 4.6 million barrels to 120.1 million—well below what analysts in a Reuters poll had forecast. UBS’s Giovanni Staunovo described it as “a very bullish EIA report,” highlighting stronger oil demand stateside. Heating oil futures jumped roughly 2.6% off the back of the numbers, according to Reuters. Reuters
Refiners operated at 91% of capacity last week, according to the agency. Distillate fuel output averaged 4.9 million barrels a day. As for distillate inventories, the EIA summary put them roughly 5% under the five-year average for this point in the year.
U.S. distillate inventories dropped to 120.099 million barrels for the week ending Feb. 13, according to separate EIA figures, falling from 124.665 million barrels the previous week.
Retail prices for No. 2 heating oil in the U.S. averaged $4.075 per gallon during the week of Feb. 16, before taxes. The East Coast came in a bit higher at $4.104, and New York state topped both at $4.317, according to EIA figures.
Still, the outlook isn’t straightforward. According to Reuters, OPEC and its allies are considering bringing back oil output hikes starting in April. At the same time, Saudi crude exports slid to 6.988 million barrels per day—the lowest level since September, based on JODI figures. “The market could continue to rally” on tensions between the U.S. and Iran, said Andrew Lipow of Lipow Oil Associates, but any additional supply coming onto the market would likely blunt that rally. Reuters
The EIA’s weekly petroleum numbers, covering data up to Feb. 20, are set for release Feb. 25 after 10:30 a.m. ET. On another front, traders are watching for any updates in the U.S.-Iran timeline, a factor that’s been pushing oil and distillates in tandem.
