Heating oil futures fall 3-4% after Russia diesel deal fails to move pump prices
Heating oil futures fell 3 to 4 percent after the Trump administration's Russia diesel deal did nothing to bring down US fuel prices, according to OilPrice.com. The deal was supposed to loosen diesel and ease the cost at the rack. It hasn't. For jobbers heading into heating season, that softness at the top is the number that matters this week.
The Russia diesel deal
Washington leaned on the Russia arrangement to pull prices lower, and the market gave back 3 to 4 percent on the distillate side when it didn't land. Diesel and heating oil are the same barrel for most of you, so a move in one shows up in the other. The political read is sharper than the trading read: OilPrice flags this as a midterm problem for the White House, with neither diesel nor heating oil holding the levels seen earlier.
For a delivery operator, softer futures could mean cheaper wholesale into November. Could. Nothing in the deal has actually freed up supply yet, so don't lock your winter book on a headline.
Saudi supply risk
Brent is near $105 a barrel, and Houthi attacks are threatening Saudi oil infrastructure and Gulf shipping. Crude at that level keeps heating oil from falling much further. The futures slid on the diesel news, but a crude benchmark at $105 with live attacks on export points doesn't leave much room underneath.
OilPrice is calling Saudi Arabia the oil market's biggest wild card. If the Gulf shipping threat escalates, the distillate relief you saw this week could reverse fast. Watch the strait, not the press release.
Richmond spill
Rhode Island DEM responded to a home heating oil spill in Richmond on Tuesday. An exterior tank on Church Street leaked about 50 gallons into the backyard, and DEM says the damage was limited to the soil. The resident hired a contractor to clean it up.
Fifty gallons is a driveway's worth, not a disaster. The reason it's here: exterior tank failures are your liability exposure every single delivery. One corroded fitting on a customer's tank becomes your remediation call and your DEM paperwork. Check the tanks you fill before you fill them.
What to watch
Whether the Russia diesel deal actually moves any product, or stays a headline that moved futures and nothing else. If no real barrels show up, this week's 3 to 4 percent dip may not hold.
Watch Brent against the Houthi situation. Any strike that lands on Saudi export capacity could pull distillate back up regardless of what Washington does. And watch your own customers' outside tanks as temperatures drop and burners come back online.