NEW YORK, Jan 29, 2026, 07:14 EST — Premarket
- Heating oil futures edged higher in early trading, boosted by rising crude prices amid Middle East tensions.
- U.S. inventory figures revealed a slight increase in distillates while crude stocks saw a more significant drop.
- Traders are focused on geopolitics and upcoming U.S. stockpile data.
Heating oil futures crept up Thursday, lifted by another surge in crude amid heightened Middle East tensions. The front-month contract gained roughly 0.4%, settling near $2.4566 a gallon, up from $2.4469 at the last close. Prices swung between $2.4232 and $2.4621 during the session, with 14,094 contracts changing hands.
The benchmark contract—currently the NY Harbor ULSD futures on NYMEX—is priced in U.S. dollars per gallon, covering 42,000 gallons. It serves as a crucial hedge for diesel and heating fuel, with price shifts often spilling over into freight expenses and winter heating costs.
As winter winds down, that sensitivity grabs attention. A sudden cold snap can drain barrels from storage quickly, while refineries don’t always respond in kind.
Crude led the overnight move, with Brent climbing roughly 2% to near $69.79 a barrel. WTI jumped over 2%, hitting about $64.58 as tensions between the U.S. and Iran drew investor focus, Reuters reported. John Evans, an analyst at PVM, warned of potential “collateral damage” if Iran closes the Strait of Hormuz, which handles around 20 million barrels daily. Citi analysts estimated the geopolitical risk premium at $3 to $4 a barrel. Reuters
U.S. distillate fuel oil stocks climbed 329,000 barrels to 132.921 million in the week ending Jan. 23, according to the latest data. Meanwhile, commercial crude inventories dipped roughly 2.3 million barrels, settling at 423.754 million barrels, the U.S. Energy Information Administration reported. The EIA’s next update is scheduled for Feb. 4.
Crude prices climbed Wednesday, boosted by concerns over Iran and a weaker dollar. Traders kept an eye on the final stages of Winter Storm Fern as producers gradually restarted wells, Reuters reported. UBS analyst Giovanni Staunovo described the inventory data as a “solid report,” noting the next batch will better reveal the impact of cold weather. Reuters also quoted Russia’s Interfax news agency, which said trilateral talks between Russia, Ukraine, and the U.S. are scheduled to resume in Abu Dhabi on Feb. 1. Reuters
Heating oil inventories showed a mixed picture. While a slight build in distillates could limit upside, a rally driven by crude often keeps buyers interested, at least at the start.
Spreads matter, too. When the diesel crack—the margin earned from refining crude into distillate—widens, refiners get a stronger push to ramp up production of middle distillates. But if that spread tightens, heating oil can quickly lose its edge, even if crude prices stay firm.
The market can shift quickly. Should the Iran premium vanish or distillate inventories swell as refineries boost output, heating oil could slip back toward recent lows—particularly if the weather warms up.
Traders are shifting focus to headlines from Washington and Tehran, looking for any clues about supply disruptions overseas. In the U.S., the Feb. 4 EIA report looms as the key near-term event, with distillate inventories and refinery runs expected to influence the market into early February.
