The American Petroleum Institute (API) recently conducted a private survey on oil stocks in the U.S. They anticipated a decrease in the following: – Crude oil: 2 million barrels – Distillates: 0.6 million barrels – Gasoline: 1.1 million barrels This survey includes data from oil storage facilities and companies. Meanwhile, the official data from the U.S. Energy Information Administration (EIA) is coming soon. This report, based on information from the Department of Energy and other agencies, gives a complete overview of the oil market. It details refinery inputs and outputs, along with storage levels for different types of crude oil—light, medium, and heavy.

API Report and Comparison

The API report sheds light on total crude oil storage levels and weekly changes. On the other hand, the EIA report is regarded as more reliable, offering an in-depth analysis of the oil market. It examines key indicators affecting oil storage and overall market conditions. Together, these reports present different angles of the oil landscape. We often see that the private survey figures influence market sentiment before the official data comes out. Still, the government’s EIA report, released tomorrow morning, is what truly impacts prices because it is seen as far more thorough and accurate. We need to pay attention to how much the EIA report deviates from these private figures and the market’s expectation of a 2 million barrel drop in crude. With the possibility of unexpected results, we’re exploring options strategies that could benefit from a sudden price shift in the coming days. A significant deviation in the EIA report could lead to considerable market volatility, making it worthwhile to bet on that volatility before the numbers are announced. For example, buying both a call and a put option on a major oil ETF could be profitable if the price moves sharply, either up or down, tomorrow. We should also note that we just passed Labor Day weekend, which signals the end of the peak summer driving season in the U.S. Gasoline demand typically decreases seasonally through September, which might lessen the impact of any draw in gasoline stocks. Additionally, recent job data was slightly weaker than expected, raising concerns about overall economic demand as we approach the fourth quarter.

Supply Concerns and Market Impact

On the supply front, the market is anxious about possible disruptions in the Gulf of Mexico, especially during this peak hurricane season. Looking back at Hurricane Ida in 2021, we see how such events can quickly tighten the market for weeks. This unease comes as we await insights from the next OPEC+ meeting, with current production cuts keeping WTI crude prices steady at around $86 per barrel. So, while tomorrow’s inventory report is the immediate focus, it is framed by tight existing supply. U.S. crude inventories are already about 4% below the five-year average for this time of year, making any large draw more impactful. If the draw is bigger than expected, it would confirm this supply tightness and likely push prices up, despite the usual seasonal slowdown in demand. Create your live VT Markets account and start trading now.

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