US heating oil futures dropped to about $2.50 per gallon, down from June highs as falling crude feedstock costs and worries about a looming global supply glut weighed on product markets. OPEC and its allies have been restoring capacity while non-member producers boosted output, and the group expects world oil demand to grow by about 1.3 million barrels per day this year and 1.38 million next year, with OPEC output nudging up to roughly 28.46 million barrels per day in October even as total OPEC plus production was little changed. Meanwhile, the distillate complex remains tight, as US distillate inventories fell by about 643,000 barrels in the week ending October 31th, the fifth consecutive weekly draw, leaving stocks well below seasonal norms and eroding the usual cushion refiners and distributors hold into winter, while refinery runs and diesel yields have softened so added crude has not translated into more middle distillates.
