NEW YORK, Jan 22, 2026, 07:03 EST — Premarket
- ULSD (heating oil) futures slipped early Thursday following a steep, weather-fueled surge the previous day.
- Traders are preparing for a delay in Thursday’s U.S. government stockpile data release.
- Cold-weather forecasts and refinery operations continue to drive near-term fluctuations.
NYMEX February ultra-low sulphur diesel (ULSD) futures — often still referred to as heating oil — dropped 6.0 cents, or roughly 2.5%, settling at $2.3703 a gallon by 7:03 a.m. EST. Crude and gasoline futures slid as well, even as U.S. natural gas prices continued their climb. 1
The pullback coincides with winter demand kicking in. ULSD follows the broader distillate market—a category covering diesel and heating oil—so price shifts can quickly impact trucking expenses and heating bills in the Northeast as temperatures drop.
Timing is key. The U.S. Energy Information Administration’s weekly petroleum report, postponed due to Martin Luther King Jr. Day, will drop Thursday at noon and 2 p.m. Eastern. 2
A cold front is moving through much of the eastern two-thirds of the U.S., with refiners closely monitoring their equipment. The National Weather Service predicts sub-zero temperatures will hit the Northeast by Sunday and push down to the Gulf Coast early next week. Refineries are generally built to operate between 32 and 95 degrees Fahrenheit, Reuters noted. ULSD prices surged roughly 4% on Wednesday. TACenergy described the cold snap as “catching the market off guard,” boosting the likelihood that utilities will rely more on supplemental fuel. 3
Oil prices edged lower as traders scaled back some of the geopolitical risk premium and turned their attention back to supply and demand fundamentals. Ole Hansen, chief commodity analyst at Saxo Bank, described the move as a “deflation of risk premium.” Tony Sycamore from IG suggested crude might stabilize around $60 a barrel. Data from the API, reported by market sources, showed U.S. crude and gasoline inventories rose last week, even as distillate stocks slipped a bit. Yang An at Haitong Futures noted that “high crude inventories” are limiting upside potential. 4
Heating oil has kept most of its recent gains, with the market still on edge. Traders are caught between actual demand figures and shifting weather reports, wary of being short ahead of a cold snap—or stuck long if temperatures unexpectedly rise.
The bigger headache for bulls is the crude outlook. The International Energy Agency warned this week of a hefty surplus, forecasting supply to exceed demand by 4.25 million barrels per day in Q1 and an overall surplus around 3.69 million bpd for 2026, despite raising its demand-growth forecast. 5
Outages continue to emerge. Sources told Reuters that Kazakhstan’s Tengiz and Korolev oilfields could be offline for 7–10 days. Such disruptions tend to push the entire energy complex higher, even when distillates dominate the headlines. 6
That could change fast. Should the cold ease up, or refineries keep operating over the weekend without major hiccups, the weather-driven premium in heating oil might vanish quickly — particularly if Thursday’s government report reveals a rise in distillate inventories.
Traders turn their attention next to Thursday’s EIA inventory report, followed by revised U.S. temperature forecasts through Sunday and early next week, as cold air pushes toward the Gulf Coast.
