NEW YORK, Feb 2, 2026, 06:46 EST — Premarket
- U.S. heating oil futures dropped roughly 5% in early trading, following a steep decline in crude prices.
- The retreat comes after U.S. President Donald Trump hinted over the weekend at potential negotiations with Iran.
- U.S. inventory data this week is drawing traders’ attention for new clues on distillate supply.
U.S. heating oil futures dropped almost 5% Monday morning, deepening a sharp pullback across energy markets as crude prices weakened. The contract slipped 12.6 cents to $2.4075 a gallon, with intraday trading ranging from $2.3917 to $2.4517. (Investing)
This shift is significant since heating oil, known as NY Harbor ultra-low sulfur diesel (ULSD), signals trends in U.S. diesel and winter fuel demand. A sharp decline like this often pushes traders to adjust distillate prices ahead of new inventory data and upcoming cold-weather reports.
This time, the move looks less about demand and more about geopolitics seeping into the price. Crude dropped after Donald Trump’s weekend remarks that Iran was “seriously talking” with Washington, easing worries over a near-term supply hit from an OPEC member. “The lack of a further escalation … weighed on oil prices,” said Giovanni Staunovo at UBS. Priyanka Sachdeva at Phillip Nova highlighted the dollar, noting the “recent pullback” was pushed further by renewed strength in the U.S. currency. (Reuters)
Supply policy offered little support for bulls. OPEC+ decided to keep output steady through March. The group’s secretariat also confirmed it received updated compensation plans from Iraq, the United Arab Emirates, Kazakhstan, and Oman, all of which exceeded their production targets. (Reuters)
Attention now shifts to the data calendar. The American Petroleum Institute’s weekly statistical bulletin usually drops Tuesday afternoon and traders often treat it as a preview ahead of official government numbers. (American Petroleum Institute)
The next key data point from the U.S. government is the Energy Information Administration’s Weekly Petroleum Status Report, scheduled for release on Feb. 4, 2026. (U.S. Energy Information Administration)
The EIA typically releases its reports at 10:30 a.m. Eastern every Wednesday, unless a holiday shifts the schedule, according to its timetable. (U.S. Energy Information Administration)
Traders tracking distillates will zero in on inventory trends and implied demand, along with whether refiners maintain high runs to rebuild stocks without oversupplying. Even with tight local fuel balances, a weaker crude market can still pull heating oil lower.
The downside isn’t straightforward. If talks between Washington and Tehran hit a snag—or if tensions flare again—that could push a risk premium back into crude and, by extension, heating oil prices. Traders are also keeping an eye on whether China scales back crude imports following January’s price surge, which could shake up the market as winter wanes. (Reuters)
After inventories, eyes turn to Feb. 10, when the EIA releases its Short-Term Energy Outlook. This report offers a key glimpse into the agency’s forecasts for oil and petroleum products. (U.S. Energy Information Administration)
