September heating oil traded lower in early morning action and fell to its lowest level since July 7th. The heating oil market sold off sharply in the wake of yesterday's EIA inventory data that showed a rise in distillate supplies of 409,000 barrels. EIA distillate stocks are running 17.432 million barrels below last year but 7.364 million above the five year average. Distillate imports came in at 205,000 barrels per day, compared to 161,000 barrels the previous week. Average total distillate demand for the past four weeks was up 1.69% from last year. Some traders indicated that the soft demand reading in distillates was a key factor behind breakdown. EIA heating oil stocks rose 896,000 barrels.