US weekly crude oil inventories fell by 9.119 million barrels in the week to 5 June, based on API data. The draw was deeper than market expectations of a 3.4 million-barrel decline, pointing to a faster-than-anticipated reduction in stockpiles over the period.<\/p>\n
The result leaves the weekly change at -9.119 million versus a -3.4 million consensus forecast. API\u2019s report focuses on crude oil inventories and is often monitored as an early indicator ahead of subsequent official updates.<\/p>\n
We are viewing the unexpectedly large crude oil inventory draw as a significant bullish signal for the market. A drop of over 9 million barrels far exceeds forecasts and points to much stronger demand than was being priced in. The official EIA report today confirmed a similarly large draw of 8.7 million barrels, solidifying this trend.<\/p>\n
This draw is happening right as the summer driving season begins, suggesting demand is accelerating. U.S. refinery utilization rates have already ramped up to 95.1%, the highest level this year, to meet anticipated fuel consumption. This aligns with recent travel forecasts which project a 5% increase in highway travel for the July 4th holiday week compared to last year.<\/p>\n
In response, we are positioning for higher prices in the coming weeks through derivatives. We are looking at buying August WTI call options with strike prices around $90 and $92. This allows us to capture potential upside from peak summer demand while defining our risk.<\/p>\n
For those with a more moderate risk appetite, selling cash-secured puts below the current market price is also attractive. With implied volatility rising after this news, premiums are richer, offering a better return for taking on the obligation to buy crude at a lower price. This strategy benefits if prices rise, stay flat, or even fall moderately.<\/p>\n
This strong domestic demand picture is further supported by the global supply situation. OPEC+ has signaled it will maintain its current production cuts through the end of the third quarter. Historically, the combination of disciplined OPEC+ supply and a surprise inventory draw at the start of summer, as seen in June of 2021, often precedes a sustained period of price strength.<\/p>\n","protected":false},"excerpt":{"rendered":"
API reports US crude inventories plunged 9.119 million barrels, beating forecasts, boosting bullish sentiment as summer demand rises.<\/p>\n","protected":false},"author":103,"featured_media":41756,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[104,103,109,66,85],"class_list":["post-54795","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates","tag-bullish","tag-derivatives","tag-markets","tag-oil","tag-united-states"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/54795","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\/103"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=54795"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/54795\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/41756"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=54795"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=54795"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=54795"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}