ULSD Futures Slide on Inventory Build and Heating Oil Reserve Release

The Energy Information Administration reported that U.S. distillate stockpiles expanded by 1.7 million barrels last week. While supplies remain 9% below the five-year seasonal average, this marks the first time in recent weeks that the deficit has narrowed out of double-digit territory. Concurrently, Reuters reported the Department of Energy plans to loan up to 315 million barrels of heating oil to dampen rising costs.

Contrasting the distillate build, commercial crude and gasoline inventories saw significant declines. Crude stocks dropped by 3.1 million barrels, while gasoline fell by 3 million barrels, bolstered by unexpectedly strong demand of 8.982 million barrels per day. Despite these tightening metrics, crude and RBOB futures showed minimal volatility. The December West Texas Intermediate contract slipped 13 cents to $97.69 per barrel, while Brent crude saw a modest gain of 35 cents to reach $109.14 per barrel.