U.S. heating oil futures rose above $2.57 per gallon in January, reaching an over six-month high, as expectations of Federal Reserve rate cuts, fueled by softer-than-expected U.S. core inflation data, boosted optimism for stronger economic activity and higher energy demand. Additionally, the latest EIA report showed an eighth consecutive draw in crude oil inventories, which fell by 1.96 million barrels, surpassing market expectations for a 1.6 million-barrel draw for the week ending January 10th. Meanwhile, global oil demand forecasts remain positive, with OPEC predicting steady growth through 2026, supporting bullish sentiment. However, distillate stockpiles increased by nearly three times the expected 1.1 million-barrel build, reaching 3.07 million barrels, while heating oil inventories rose by 0.65 million barrels for the same period, easing supply pressures for the heating commodity.
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