EIA and API Inventories Can’t Hold WTI Oil Price

Oil prices reversed lower yesterday after the jump on Friday, despite OPEC planning to push production cuts until the end of the year. Yesterday we had the API private Oil inventories which showed a drawdown for the headline number, while today the EIA inventories also showed a decline, but that is not helping Oil prices whatsoever.

Crude Oil Chart Daily – The 100 SMA Is Under Attack Now

The prevailing risk-off sentiment in the broader market has indeed exerted downward pressure on oil prices, despite the larger-than-expected drawdown in US crude inventories reported by both the API and EIA. This indicates that factors such as macroeconomic concerns and geopolitical tensions are currently outweighing the impact of inventory data on oil prices.

Furthermore, the resilience observed in US economic activity suggests that borrowing costs may remain elevated for an extended period. Elevated borrowing costs can potentially dampen oil demand by affecting consumer spending and business investment, thereby impacting overall economic activity and energy consumption.

EIA Crude Inventory Data:

• Crude inventories declined by 4,156,000 barrels, surpassing market expectations of a decrease of 1,950,000 barrels.
• Gasoline inventories increased by 2,022,000 barrels, contrary to expectations of a decrease of 450,000 barrels.
• Distillate inventories rose by 2,544,000 barrels, compared to an anticipated decline of 150,000 barrels.
• Refinery utilization saw a larger-than-expected increase of 2.6%, surpassing the forecasted rise of 0.3%.

Overall, the EIA’s report reflects a significant drawdown in crude oil inventories, which could potentially support oil prices. However, the increases in gasoline and distillate inventories, coupled with higher refinery utilization, suggest mixed dynamics in the US oil market.

API Inventory Data from yesterday:

• Crude inventories showed a larger drawdown of 6,490,000 barrels.
• Gasoline inventories decreased by 452,000 barrels.
• Distillate inventories increased by 2,045,000 barrels.
• Cushing inventories declined by 1,706,000 barrels.

Overall, both the EIA and API reports indicate a drawdown in crude oil inventories, although the EIA’s figure was smaller. Gasoline inventories decreased in the API report but increased in the EIA report, while distillate inventories increased in both reports. Additionally, refinery utilization saw a larger increase in the EIA report compared to expectations, indicating higher refinery activity.

US WTI Crude Oil Live Chart