New York, Jan 23, 2026, 07:18 EST — Premarket
- Heating oil futures climbed in early trading following a steep decline the day before.
- Forecasters issued warnings for heavy snow and extreme cold across a large portion of the U.S. this weekend.
- Traders are focused on how refineries handle the cold and await the upcoming U.S. inventory report.
U.S. heating oil futures jumped 1.3% to $2.3976 a gallon by 7:18 a.m. EST, rebounding sharply after a sharp drop the previous day.
Traded as NY Harbor ultra-low sulfur diesel (ULSD), this contract stands as the benchmark U.S. futures market for heating oil and diesel. Price shifts here often ripple swiftly into wholesale costs across the Northeast during peak winter—and affect diesel prices for trucking and industrial users.
Weather is the immediate factor at play. The National Weather Service warned a massive storm will sweep across much of the central and eastern U.S. through the weekend. A meteorologist noted that “half of all Americans are under some form of weather advisories.” Reuters
Refiners are preparing for the cold snap, which risks equipment failures and lower production. Reuters noted that a few operators have already started precautionary measures as an Arctic blast sweeps through the eastern two-thirds of the U.S.
Supply data show a mixed picture. The U.S. Energy Information Administration reported a 3.3 million barrel increase in distillate fuel inventories last week, though stocks remain roughly 1% under the five-year average. At the same time, distillate product supplied over the past four weeks was down 1.1% compared to the same period last year.
Thursday’s slump continues to weigh on the market. Heating oil futures ended at $2.3668 a gallon on Jan. 22, falling 2.62% after a volatile session.
Crude oil’s drop has also put a damper on distillates. Brent closed at $64.06 a barrel Thursday, with U.S. WTI at $59.36, following what one analyst described as a “deflation of risk premium.” This shift rippled through to refined products. Reuters
Oil saw a short-lived boost earlier this week on concerns about supply disruptions in Kazakhstan and Venezuela. Still, analysts flagged broader trade tension worries. Giovanni Staunovo at UBS warned that tariffs might drag down growth, hitting market mood.
The heating oil rally could reverse just as fast. Should temperatures ease, the storm path change, or refineries prove more resilient than expected, traders might zero in on the recent inventory rise and push prices lower.
On Jan. 28, U.S. weekly petroleum data will be released, with traders watching closely to see if distillate stocks shrink as the cold weather digs deeper into the East.
