New York, Jan 28, 2026, 07:17 EST — Premarket
- February heating oil (ULSD) futures fall 0.8% in early trade; March gains 0.7%
- Storm-related supply disruptions keep distillates in focus, with traders watching restarts
- Next catalyst: U.S. weekly petroleum report due after 10:30 a.m. ET
U.S. heating oil futures slipped in early Wednesday trade, paring part of Tuesday’s storm-driven jump. February NY Harbor ultra-low sulfur diesel (ULSD) — the main U.S. heating oil benchmark — fell 2.12 cents, or 0.8%, to $2.6250 a gallon, while March rose 1.63 cents, or 0.7%, to $2.4269.
The moves matter because the winter storm has disrupted U.S. crude production, port operations and some refining along the Gulf Coast, raising the risk of tighter supplies of distillates — the family of fuels that includes diesel and heating oil. Traders have been paying up for prompt barrels as cold weather boosts demand for space heating in the Northeast.
Analysts and traders estimated U.S. producers lost up to 2 million barrels per day, about 15% of national output, during the worst of the storm, while ship-tracking service Vortexa said Gulf Coast crude exports briefly fell to zero before rebounding as ports reopened. City Index analyst Fawad Razaqzada said short-term risks remained “tilted to the upside” on fears of supply disruptions, and PVM’s Tamas Varga warned cold weather could drive “significant drawdowns” in oil stocks if it persists. Kazakhstan’s Tengiz field is likely to restore less than half of normal production by Feb. 7, sources familiar with the matter told Reuters, and U.S. naval deployments in the Middle East kept geopolitical risk in play. Reuters
Brent was down 39 cents at $67.18 a barrel by 1017 GMT, and U.S. West Texas Intermediate fell 22 cents to $62.17, after both gained about 3% on Tuesday. A weaker dollar, expectations that OPEC+ will extend its pause on output increases at a Feb. 1 meeting, and talk of a U.S. general licence easing some Venezuela oil sanctions were also in focus, while a Reuters poll pointed to a likely decline in U.S. distillate inventories for the week ended Jan. 23.
Heating oil futures trade in the U.S. as ULSD, a wholesale benchmark for diesel and heating fuel. It tends to track crude oil, but refinery runs and regional logistics can move it sharply in winter.
With February nearing expiry, the prompt month can swing harder on any hint of shortage or restarts. Some hedgers and speculators are already shifting risk into March and later contracts, where pricing better reflects supply beyond the immediate cold snap.
The immediate question is whether Gulf Coast ports and refineries return to normal quickly enough to rebuild distillate stocks. Any slowdown leaves ULSD sensitive to day-to-day weather forecasts and refinery run rates, not just crude.
But if output and exports snap back and distillate inventories surprise to the upside, the storm premium could unwind quickly, especially if speculative money starts taking profit.
Beyond the storm, traders are still tracking the pace of Kazakhstan’s recovery and Middle East supply risks, which feed through to refined products. The market has also kept an eye on currency moves, with a softer dollar often supporting commodities priced in dollars.
The next test comes later on Wednesday, when the U.S. Energy Information Administration is scheduled to publish its Weekly Petroleum Status Report after 10:30 a.m. ET. Distillate stock figures and refinery utilisation will be key for the heating oil price into the end of the week.
