API and EIA reports ignored by market sentiment!

The latest weekly U.S. oil inventory reports show a higher-than-expected build in crude stocks, according to both the American Petroleum Institute (API) and the U.S. Energy Information Administration (EIA). Here’s a summary of the key data:

author: Ahura Chalaki

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category:commodities

Crude Oil Stocks:

The API reported a rise of 3.132 million barrels, higher than the expected 1.8 million barrels increase, compared to a previous decline of 0.573 million barrels.
The EIA data showed a 2.149 million barrel increase in crude stocks, also exceeding the anticipated 0.3 million barrel rise, following a previous draw of 0.515 million barrels.

Refinery Activity:

The EIA reported a week-over-week increase of 0.281 million barrels in refinery crude runs, an uptick from the prior decrease of 0.031 million barrels.
Refinery utilization rates rose by 1.4%, reversing a previous drop of 0.4%, indicating higher crude processing levels.

Imports and Cushing Inventories:

Crude oil imports saw a substantial rise of 1.676 million barrels, recovering from the previous 0.605 million barrels decrease.
Cushing, Oklahoma, the key U.S. storage hub, reported a stock increase of 0.522 million barrels, lower than the previous build of 0.681 million barrels.

Distillates and Gasoline:

Distillate fuel stocks grew by 2.947 million barrels, notably exceeding the expected 1.5 million barrel draw, following a prior decline of 0.977 million barrels.
Gasoline inventories saw a slight increase of 0.412 million barrels, contrary to the expected draw of 1.65 million barrels and the previous week’s larger draw of 2.707 million barrels.

These inventory levels suggest increased crude supply and slightly boosted refinery activity, contributing to the builds in both crude and refined product stocks. However, demand signals from gasoline and distillate stock changes may indicate seasonal shifts in consumption patterns. These mixed figures could impact oil prices, particularly with the market monitoring U.S. refinery activity amid global supply adjustments.

Market Reaction

Following the release of today’s EIA report, both WTI and Brent crude prices recovered after initially slipping on yesterday’s API report. The market appears to be focusing on broader economic growth expectations, with optimism around demand prospects rather than inventory builds.

On the technical side, WTI successfully rebounded above a key support level at $70, signaling the potential for further upward movement. The next target for WTI is likely around $74, which could be pivotal for sustaining bullish momentum in the near term.

This reaction underscores market sentiment leaning towards economic resilience and demand recovery following the positive economic feelings after the victory of Mr. Trump and the Republican Party overshadowing inventory data that might otherwise pressure prices. Traders will likely watch this support level closely, as a sustained position above it could confirm stronger confidence in demand projections amid fluctuating supply metrics.