The EIA’s weekly oil inventory report shows notable changes in various categories. Crude oil inventory dropped by 3.029 million barrels, while analysts expected a decrease of only 0.591 million barrels. Gasoline inventory declined by 1.323 million barrels, which is a larger drop than the predicted reduction of 0.406 million barrels.

Distillates Inventory Update

Distillates inventory fell by 0.565 million barrels, contrasting with the forecasted increase of 0.775 million barrels. Cushing inventory increased by 0.453 million barrels, down from the previous week’s increase of 0.690 million barrels. Recent private data showed that API Crude oil prices climbed by $0.75 to $65.95. The price recently approached its 100-day moving average of $64.97, which has boosted buyer confidence from a technical perspective. The latest inventory report, dated August 6, 2025, indicates a significant tightening in the market. The crude oil draw exceeded 3 million barrels—five times analysts’ expectations—indicating stronger demand than previously believed. Gasoline and distillate stocks also showed unexpected declines, contributing to a bullish outlook. The drop in gasoline inventories aligns with recent government data, which revealed a 1.5% increase in US vehicle miles traveled in July 2025 compared to last year, signaling a lively summer driving season. This rising fuel demand is currently a major driver of prices.

Technical and Supply Side Factors

From a technical viewpoint, buyers have solid reasons for optimism. The price staying above its 100-day moving average near $65 demonstrates strong support, suggesting that price dips are being quickly bought. On the supply side, major producers are still showing discipline. This follows the July OPEC+ meeting, where the group confirmed its commitment to keep production levels steady until the end of the quarter. This strategy restricts any immediate supply relief needed to meet rising demand. Given these circumstances, traders might consider bullish strategies in the upcoming weeks. This could involve purchasing call options to bet on rising prices or selling put options to earn premiums, based on the expectation that prices will stay above recent support levels. These tactics could capitalize on the upward momentum we are witnessing. This market behavior reminds us of the summer of 2021 when underestimated demand led to a sustained price rally as the world began to emerge from lockdowns. Similarly, the unexpected inventory draws now may mark the beginning of a new price surge, as the market might again be underestimating consumption strength. Create your live VT Markets account and start trading now.

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