Ahead of official government data from the US, a privately conducted survey by the American Petroleum Institute (API) offers insights into weekly oil inventories. Expectations focus on a decrease in headline crude by 1 million barrels, a rise in distillates by 0.04 million barrels, and a drop in gasoline by 0.2 million barrels.<\/p>\n
The API gathers data from oil storage facilities and companies, whereas the government report is compiled by the US Energy Information Administration (EIA). The EIA utilises data from the Department of Energy and other agencies. While the API provides insights into total crude oil storage levels and weekly changes, the EIA presents additional statistics, including refinery inputs and outputs, and storage levels across various crude oil grades.<\/p>\n
The EIA report is generally seen as more comprehensive and precise than the API survey. Notably, the official data is anticipated on Wednesday morning US time, providing a broader view of the market’s status.<\/p>\n
The private survey data released today showed a surprise crude oil inventory build of 2.5 million barrels, which is a sharp contrast to the expected draw of 1 million barrels. This discrepancy between the private American Petroleum Institute (API) data and market consensus creates immediate uncertainty. The official Energy Information Administration (EIA) report tomorrow will be critical, as it is held to be more comprehensive and accurate.<\/p>\n
In the immediate term, we are seeing traders use short-dated options to position for tomorrow’s EIA release, with volatility in the October contracts spiking. A bearish EIA number confirming the build could push WTI crude prices below the key $85 per barrel support level seen over the past month. Conversely, if the EIA shows a draw as originally expected, it could trigger a short squeeze.<\/p>\n
This inventory picture is being complicated by the ongoing hurricane season, which is proving to be active as we move through September 2025. Hurricane Leo, now a Category 3 storm, is currently tracking towards the Gulf of Mexico, threatening production facilities that account for about 17% of U.S. crude oil output. We saw how Hurricane Ida in 2021 knocked more than 2 million barrels per day offline, and the market is pricing in the risk of a similar disruption.<\/p>\n
On the demand side, signals remain robust, preventing a significant price drop on the back of the bearish private inventory data. The jobs report from last Friday showed the US economy added a stronger-than-expected 210,000 jobs in August, suggesting consumer spending and fuel consumption will remain resilient. This strong demand backdrop provides a floor for prices, even if inventories show a temporary increase.<\/p>\n
We should be cautious, remembering the significant divergence between API and EIA reports back in the spring of 2024, which led to a sharp price reversal after the official data was released. The private API survey is useful, but the EIA report provides a clearer picture by including data on refinery inputs and other key market indicators. Therefore, holding any high-conviction position before tomorrow\u2019s official numbers carries significant risk.<\/p>\n
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