New York, Feb 19, 2026, 14:21 EST — Regular session
- NYMEX heating oil (ULSD) futures jumped roughly 3.6%, trading near $2.61 per gallon in U.S. afternoon hours
- U.S. distillate stocks dropped more than analysts anticipated as demand surged to levels not seen in two years.
- Crude’s climb, powered by U.S.-Iran tensions, spilled over into refined products, lending them extra support.
Heating oil futures on the NYMEX jumped Thursday, boosted by a sharp decline in U.S. distillate inventories and momentum from stronger crude prices. March futures added 9.05 cents, or 3.59%, to $2.6092 per gallon after briefly touching $2.6097. 1
This shift is notable: heating oil shares the “distillate” pool with diesel, so traders closely track that market for any signs of winter supply strain. When distillate inventories shrink further, prices can jump fast—especially if cold weather props up demand and refineries are pushing near capacity.
Geopolitics is once again steering the market. A spike in crude prices usually sends distillates higher too, though heating oil has a tendency to run even hotter—especially when diesel is the tightest supply out there.
Distillate inventories—which cover both diesel and heating oil—dropped by 4.6 million barrels last week, while demand surged to 4.75 million barrels per day, marking the highest level since January 2022, according to data from the U.S. Energy Information Administration. “Support for oil prices came from a very bullish EIA report,” UBS commodity analyst Giovanni Staunovo said. Phil Flynn at Price Futures Group pointed to the draw on diesel as the reason behind the slide in distillate stocks. 2
The EIA put distillate stocks roughly 5% under the five-year norm for this period, leaving the market with a thinner buffer as the heating season winds down. Refineries operated at 91% of capacity, while distillate output hovered near 4.9 million barrels a day, according to the agency’s weekly summary.
Crude remained in demand, supporting prices. Oil climbed to its highest level in six months, with traders factoring in rising U.S.-Iran friction and renewed alarms about the Strait of Hormuz, the critical route for much of the world’s oil. “The market will continue to rally in anticipation of something happening,” said Andrew Lipow, president of Lipow Oil Associates. 3
Heating oil isn’t just following the crowd. Distillate stocks are highly responsive when supplies shrink—they’re drawn by transport, industry, and homes all at once, so even small refinery outages or a surprise jump in usage can whip the market around.
Prices had started climbing even before Thursday’s surge. On Wednesday, the contract finished 5.36% higher, kicking off a two-day rally that’s got traders sharpening their focus on distillate balances rather than just crude. 4
But there’s a catch to the upside. Should tensions ease quickly or late-winter temperatures warm up, heating demand might drop off sharply. With refineries already running hard, distillate inventories could climb again just as seasonal usage begins to tail off.
The EIA’s next Weekly Petroleum Status Report lands on Feb. 25, giving traders a shot at figuring out if the recent draw reflects a one-off blip from the weather or marks the kickoff of a tighter stretch heading into March. 5
