March heating oil prices are slightly lower this morning, pressured by weakness in the crude oil market and a decline in risk-taking sentiment. With the prospects of Greece facing a potential default and contagion spreading throughout the Euro zone, economic growth and demand have come under scrutiny. March heating oil prices rallied back toward yesterday's high in the wake of EIA inventory data that showed a larger than expected draw in distillate stocks of 2.867 million barrels. While the deficit in supply compared to year ago levels has declined for the past 3-weeks, it still stands at 17.553 million barrels. Distillate imports came in at 132,000 barrels per day compared to 111,000 barrels the previous week. Average total distillate demand for the past four weeks was down 2.59% compared to last year. While the demand figures were a bit disappointing, the stock draw on the back of greater US export flow was seen as an offsetting force. US heating oil supplies slipped by 929,000 barrels last week to 30.497 million, the lowest for this point in the year since 2009. EIA heating oil supplies are 8.216 million barrels below last year and 9.213 million below the five year average.
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