2025.11.1214:16:53UTC+00Heating Oil Tracks Crude Lower

U.S. heating oil futures have declined to approximately $2.51 per gallon, retreating from their peak levels in June. This drop is largely attributed to falling crude feedstock costs and concerns about a potential oversupply in global markets. The Organization of the Petroleum Exporting Countries (OPEC) and its allies have been gradually reinstating production capacities, while non-member producers are also increasing their output. OPEC projects global oil demand to expand by around 1.3 million barrels per day this year, further increasing to 1.38 million barrels per day next year. In October, OPEC's production rose slightly to an estimated 28.46 million barrels per day, despite the overall OPEC+ production remaining relatively stable. Concurrently, the distillate sector continues to experience tightness; U.S. distillate inventories decreased by approximately 643,000 barrels in the week ending October 31st. This marked the fifth consecutive week of decline, leaving inventory levels well below seasonal averages and reducing the typical buffer that refiners and distributors maintain heading into winter. Moreover, refinery operations and diesel yields have diminished, meaning the additional crude supply has not resulted in a corresponding increase in middle distillates.