New York, February 25, 2026, 14:27 EST — Regular session
- Front-month NY Harbor ULSD (heating oil) futures jumped over 3% on the day.
- U.S. data pointed to a hefty crude build, though distillate inventories remain under typical seasonal levels.
- Next up for traders: U.S.-Iran diplomatic moves and the OPEC+ gathering set for March 1.
NY Harbor ULSD futures, the key U.S. yardstick for diesel and heating oil, pushed higher Wednesday. The front-month contract gained 3.3%, settling at $2.6714 per gallon. (CME Group)
This shift is significant: distillate fuels are right where winter heating needs meet freight flows. Diesel getting scarce? That can push up everything from Northeast home heating bills to trucking charges, and its price path rarely mirrors crude.
The timing—late winter—adds to the volatility, with inventories and refinery output quick to shift thanks to weather or maintenance. That leaves prices exposed to sharp swings within the day.
U.S. crude stockpiles jumped by 16.0 million barrels last week, according to a weekly government tally, as refinery utilization slipped to 88.6%. Distillate inventories edged up 0.3 million barrels but still hovered roughly 5% under the typical five-year level for this period. Distillate fuel production pulled back to 4.8 million barrels per day. (Energy Information Administration)
Crude futures slipped after the inventory numbers landed—Brent at $70.65 a barrel, U.S. WTI falling to $65.37 late in the morning, according to Reuters. Giovanni Staunovo, commodity analyst at UBS, called the EIA data “bearish” thanks to that crude build. Still, Middle East tensions continue to shape sentiment. (Reuters)
Heating oil often outpaces crude, a move tied closely to the products side of the equation—traders eye distillate inventories and refinery throughput, not only the broader crude supply figures. Diesel and heating oil both fall under the distillate category, and these fuels typically see the quickest price response if refiners slow production or cold weather squeezes supplies.
Spreads are key, too. ULSD often trades as a refinery “crack”—the margin signal from converting crude into diesel—and that margin doesn’t always shrink when crude prices ease. Sometimes, it actually gets wider.
Here’s the risk: refinery runs pick up, distillate stocks climb through early March, and just like that, the winter premium could vanish. Also, any easing in Middle East tensions—if diplomacy gains traction—would quickly cool off the complex.
All eyes shift to Thursday, when U.S.-Iran talks pick up in Geneva, while eight OPEC+ producers have a March 1 meeting on deck—either could jolt crude and products. The coming U.S. weekly petroleum report should cut through the noise, showing if distillate tightness is actually biting or just another late-winter bluff.
