Insights 
VT 
A privately conducted survey by the American Petroleum Institute (API) has shown a build in headline crude oil stocks contrary to expectations of a 1.3 million barrel draw. The expectations also included a 0.3 million barrel increase in distillates and a 0.6 million barrel decrease in gasoline.
This API survey provides data from oil storage facilities and firms, differing from the official government data. The official report from the US Energy Information Administration (EIA) will be released Wednesday morning.
EIA Report Details
While both reports supply information on overall crude oil storage levels and week-on-week changes, the EIA report is more detailed. It includes data from the Department of Energy and other government agencies. Additionally, the EIA report provides insights into refinery operations and presents statistics for different crude oil grades like light, medium, and heavy.
The EIA’s assessment is often regarded as more accurate and comprehensive than that of the API. The two reports serve different roles in portraying the status of the oil market.
Based on this private survey data from July 29, 2025, we are bracing for potential short-term weakness in oil prices. The unexpected build in crude inventories, against a market consensus for a draw, suggests either a drop in refinery demand or a surge in supply. We will be watching the front-month WTI and Brent contracts for a bearish reaction overnight.
This report creates significant uncertainty ahead of the official government data. With West Texas Intermediate (WTI) crude recently trading firmly above $82 per barrel, this API number could halt the recent upward momentum. Official EIA data has shown inventory draws for three straight weeks, so a confirmed build tomorrow would signal a meaningful shift in the market balance.
Considerations and Forecasts
We must also consider the demand side, especially for gasoline during peak driving season. U.S. gasoline consumption has been steady at around 9.1 million barrels per day, but it has not reached the robust levels of pre-pandemic summers. If the EIA report confirms the private survey’s hint of weakening demand, we may see prices for gasoline futures fall, dragging crude down with them.
Looking ahead, we are positioning for heightened volatility in the coming weeks. We are entering the most active part of the Atlantic hurricane season, and recent forecasts from NOAA predict an above-average number of named storms. A significant storm in the Gulf of Mexico could disrupt production and send prices sharply higher, quickly erasing any bearish inventory news.
For derivative positions, this suggests caution on outright directional bets until the EIA confirms a trend. We see an opportunity in options to hedge downside risk, perhaps by purchasing puts on crude oil futures expiring in the next few weeks. Given the conflicting signals, strategies that profit from a spike in volatility, such as a long straddle, could also be considered ahead of tomorrow’s official report.
