Oil stock data from a private survey by the American Petroleum Institute (API) shows some expectations: crude oil is expected to decrease by 0.3 million barrels, distillates are set to rise by 0.7 million barrels, and gasoline is projected to drop by 0.7 million barrels. This survey collects information from oil storage facilities and companies. The official report will be released by the US Energy Information Administration (EIA) on Wednesday.

Comparison of API and EIA Reports

The API report gives us details on total crude oil storage and changes from the previous week. On the other hand, the EIA report pulls data from the Department of Energy and other government agencies, offering extensive statistics on refinery inputs and outputs. Additionally, the EIA report covers different grades of crude oil storage, such as light, medium, and heavy. It is regarded as more accurate and thorough compared to the API survey. The private survey data we just reviewed suggests that the market is better supplied than we thought. Instead of the expected slight drop in crude oil, the API estimates show an increase of over 2 million barrels. This difference between what was anticipated and the API’s data brings uncertainty and a bearish sentiment to overnight trading. This unexpected increase in inventory puts pressure on oil prices, which have been fairly stable between $82 and $86 for WTI crude over the past month. This news follows a report from a week ago that highlighted a small decline in US consumer travel during the first week of August 2025, supporting the notion of weakening demand. For now, this indicates that prices are likely to decrease ahead of the upcoming definitive data.

Potential Market Implications

The main point here is that we can expect a rise in short-term volatility leading up to tomorrow’s official EIA report. The gap between the API data and market expectations creates a perfect setting for a notable price change. We should anticipate high implied volatility on options set to expire this week, making strategies that benefit from price shifts—like straddles—more appealing, but also costlier. We need to keep in mind that sometimes the API and EIA reports show conflicting results. Looking back at spring 2025, there were two occasions where a surprise increase in the API numbers was followed by a much smaller change in the EIA report, resulting in sudden price reversals. Since the EIA data is more detailed, making a large bet before its release carries quite a bit of risk. Over the next few weeks, we will monitor if the official data confirms the signs of weakening demand and rising inventory levels. If the EIA report supports the API’s figures tomorrow, it might indicate a fundamental change, potentially pushing WTI futures to test the $80 support level we saw earlier this summer. We should be prepared to protect our long positions or open new short ones if the data reveals a surplus. Create your live VT Markets account and start trading now.

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