New Middle East conflict hampers negotiation hopes; US heating oil futures rise for three consecutive days

⑴ US heating oil futures rose above $3.70 per gallon in early June, marking a third consecutive trading day of gains, as reports of new conflicts in the Middle East weakened hopes for a breakthrough in US-Iran negotiations.⑵ Both sides carried out new strikes, even as the US stated it is still negotiating with Iran for a potential deal to end the conflict and refuted reports that communications have broken down. Contradictory reports and ongoing strikes have made the market jittery, increasing volatility in energy commodities.⑶ Since the outbreak of conflict in March, distillate exports from the region have been severely disrupted, refineries are under pressure, and heating oil futures hit a record high of $4.60 per gallon that month.⑷ Against this backdrop, industry data shows that diesel and heating oil inventories decreased by 214,000 barrels in the last week of May.