A private survey by the American Petroleum Institute (API) showed a larger-than-expected draw in headline crude oil inventory. Expectations suggested a reduction by 1 million barrels, an increase in distillates by 1 million barrels, and a rise in gasoline stocks by 0.6 million barrels.

This survey collects data from various oil storage facilities and companies. The official government report from the US Energy Information Administration (EIA) is due on Wednesday and is generally considered more reliable.

Eia Versus Api Reporting

The EIA report combines data from the Department of Energy and other government agencies. While the API report provides information on total crude oil storage levels, the EIA report includes data on refinery inputs and outputs and varying storage levels for different grades of crude oil.

These reports differ in scope and accuracy, with the EIA report offering a more comprehensive insight into the status of the oil market. Overall, both reports provide essential information on the oil industry’s current state and trends, helping analysts and market participants make informed decisions.

Taken together, these stockpile figures show a clear divergence between projected builds and the actual movement of oil volumes. The private report pointed out a sharper draw in crude, contrasting with forecasts, which had implied a much smaller decrease. Distillates and petrol, on the other hand, came in above expectations. That matters because inventory shifts often imply changes in demand behaviour or supply rhythm, either of which can be reflected in price action.

A larger-than-anticipated dip in crude stocks usually signals stronger demand or slower supply. That’s consistent with recent whispers in the market that refining activity is picking up in some regions, particularly ahead of peak summer driving in the Northern Hemisphere. If demand is being underestimated – or if there’s been an untracked disruption on the supply side – then recent pricing levels will look under-anchored. This could push volatility higher in the near term.

The official data, which we expect shortly, tends to prompt more structured reactions given its broader reliability and inclusion of refined products, throughput rates, and regional imbalances. Traders often wait for this information to confirm or correct preliminary readings. That means the initial reaction to the private figures could see second adjustments depending on whether the government numbers match the same direction and intensity.

Impact Of Discrepancies

We’ve seen in the past that large discrepancies between these two sources can trigger position unwinding, especially when speculative positioning is stretched. Given the move in distillates and petrol, this week could invite renewed positioning across crack spreads and fuel-based derivatives – particularly in products linked to summer transport trends or marginal export flows.

The weight of evidence leans towards a re-pricing of deliverable contracts and roll strategies. Any mismatch between expectations and the confirmed data could encourage action across near-dated futures, especially if refining margins shift. In that case, we’d expect rotation into more defensive contracts as players hedge against asymmetric movement in product inventories versus headline crude.

Keep an eye on refinery utilisation rates – if throughput comes in hotter than anticipated, it might indicate a trend toward proactive product generation, perhaps in response to export pull or regional tightness. There’s been ongoing refiner interest at the Gulf coast and heightened demand signals out of parts of southeast Asia. That reinforces the potential for a more globally connected price impulse, especially at a time when shipping rates are already elevated.

For now, we err on the side of using present volatility to re-assess risk preference. Market participants may start to show preference for spreading risk over a wider distribution of product grades or delivery periods. That also leaves open the door for calendar spreads to widen if any mismatch is confirmed on Wednesday. At the margin, that may bring renewed focus on storage economics and regional backwardation – vital for shaping short-term hedging and arbitrage strategies.

We’re expecting position adjustments mid-week, and if energy complex futures start responding sharply, that’s a clear go-ahead to either refine exposure or trim headline-linked strategies built on older trend assumptions.

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