Insights 
VT 
The latest US weekly oil data shows a decrease in crude oil inventories by 4,304K barrels, surpassing the expected 1,035K reduction. Previously, the inventory had decreased by 2,795K barrels.
Gasoline stocks rose by 5,219K barrels, notably higher than the anticipated 609K increase. Distillate inventories also increased by 4,230K barrels, compared to the expected 1,018K rise.
Api Data Summary
The API data released recently indicated a crude oil inventory decrease of 3,300K barrels. Gasoline stocks increased by 4,700K barrels, while distillate inventories rose by 760K barrels.
Following the initial headlines, oil prices fell but soon recovered. The price is currently up by approximately 40 cents.
These numbers point to a tighter crude oil market than forecast, even as refined product stocks have piled up more than many had imagined. To break it down: crude on the whole is being drawn from storage at a faster pace, suggesting that demand—whether from refiners or abroad—is proving resilient. On the other hand, gasoline and distillate inventories have jumped well past expectations, which indicates that output from refineries is outstripping real-time consumption, at least for the moment.
Now, the fact that the American Petroleum Institute had already hinted at a similar drawdown in crude—and still markets dipped before bouncing—tells us something about mood. We’ve seen traders react quickly to stockpile shifts, but the data tugged them in opposite directions: a crude draw pulls one way, while big builds in products drag the other. The slight rebound in prices, about 40 cents up after a brief fall, shows that players are still adapting to mixed messages.
EIA Figures and Market Reaction
EIA figures offer a more detailed breakdown, and here they pressed harder on the product build. That’s not ideal if you’re trading based on tightening balances, especially given that product demand seems sluggish by comparison. It might also put a lid on how far crude can run on its own.
It’s also worth considering the time of year. We’re approaching the US driving season when normally fuel consumption picks up. That makes the gasoline build more surprising and potentially short-lived—but it also hints at the possibility that refiners might have overestimated how much they needed to produce.
From the recent market reaction and inventory dynamics, the path ahead looks scattered rather than smooth. We’ve been watching positioning tighten in refined products; now, that looseness could unwind some of those gains. With refined product stocks rising faster than crude is falling, it could create a brief stretch where crack spreads soften. Timing entries around refinery maintenance season could help capitalise on narrowing margins if refining throughput gets trimmed.
Yields across refined products matter more now. If margins remain under pressure, refinery incentives may weaken. That would change the drawdown rate on crude and could tip the market balance again in days rather than weeks.
We’re not seeing broad sentiment lean clearly one way, which might reinforce why reaction has been subdued. But behind that, volatility might be lurking. The conflicting direction between crude and products hints at future price dislocations, particularly into front-month contracts that quickly reflect storage pressures.
Barring any swift moves in production policy or geopolitical shifts, we’d expect those dislocations to resolve inside the curve before trades start extending observation further down the strip.
Full attention in the coming sessions should remain fixed on refinery utilisation rates and how they evolve through monthly reports. They’ll inform both the rate of future drawdowns and how sustainable current consumption patterns appear. Watching those figures closely, especially deviations in implied product demand, could offer early clues for directional positioning.
And most importantly, assessing backwardation or contango structure in response to next week’s metrics might provide clearer visibility into how tight or loose traders believe short-term physical supply remains.
