March heating oil prices traded lower during the initial morning hours and broke down to their lowest levels since January 11th. Some traders indicated that the heating oil market has been battling ideas of colder temperatures across key demand areas of the US and Europe while facing growing distillate inventories. In the meantime, the latest heating oil supply data out of Germany showed a slight contraction in the latest month, but that appeared to offer little support to prices this morning. Additionally, diesel crack spreads in Asia have come under pressure on ideas that China may begin exporting diesel in February at the same time that heating oil demand in the west tapers off.
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