US EIA data shows crude oil stocks in the United States rose by 15.989 million barrels in the week ending 20 February. <\/p>\n
The previous reading was a fall of 9.014 million barrels.<\/p>\n
The unexpected swing from a significant draw to a nearly 16 million barrel build in crude stocks is a major bearish signal for the market. This suggests either a sharp drop in demand or a supply glut that was not priced into current contracts. We believe traders should now be positioning for lower prices in the near term, possibly through buying puts on major oil ETFs or shorting front-month futures.<\/p>\n
This inventory surge aligns with growing concerns over global demand, especially after China’s January 2026 PMI report dipped below the 50-point mark to 49.8, indicating a manufacturing contraction. A slowdown in the world’s largest oil importer directly weakens the demand side of the price equation. This macro data supports the view that the large inventory build is not an isolated event but part of a wider trend.<\/p>\n
On the supply side, U.S. crude production has remained stubbornly high, holding above 13.5 million barrels per day, a lesson we learned from the persistent output growth back in 2024 and 2025. Compounding this, recent refinery utilization rates have dropped to 80.5%, meaning less crude is being processed into gasoline and distillates. This combination of high output and low refinery intake explains where the excess barrels are coming from.<\/p>\n
We saw implied volatility on near-term options spike following the report, reflecting the market’s surprise and heightened uncertainty. For traders who believe this is an overreaction, selling out-of-the-money call spreads offers a way to collect premium while betting that prices will not rebound sharply. Conversely, those expecting further slides could use bear put spreads to define their risk and cheapen their entry into a bearish position.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" US EIA reports US crude oil inventories surged 15.989 million barrels week ending February 20, reversing prior decline.<\/p>\n","protected":false},"author":62,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-43634","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/43634","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=43634"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/43634\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=43634"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=43634"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=43634"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}