**EIA Report Shows Surprising Inventory Changes** Before the report, WTI crude oil was up by 68 cents, reaching $63.32. Private data from the day before indicated that crude oil inventories increased by 1,250,000 barrels. Gasoline stocks also rose by 329,000 barrels, and distillates went up by 1,500,000 barrels. The weekly inventory numbers for September 5th were unexpectedly bearish. Instead of a decline, crude oil stocks rose by nearly 4 million barrels. Analysts had predicted a 1 million barrel draw. This points to a sudden drop in demand or an unexpected increase in supply. These numbers match recent economic data that show a global slowdown, reducing expectations for fuel use. For example, China’s manufacturing PMI for August 2025 was 49.2, indicating a second month of contraction and weak industrial demand. The significant 4.7 million barrel increase in distillates, used for diesel and heating oil, highlights this industrial weakness. **Price Implications and Trading Strategies** We have seen similar inventory patterns lead to major price drops before. For example, the big inventory builds in late 2018 led to a 40% fall in WTI crude prices that quarter. With this situation happening just as the peak summer driving season ends, it suggests that the recent price of $63.32 per barrel may not last. For derivative traders, this market favors bearish positions. We recommend buying out-of-the-money put options on WTI for October or November expiration. This strategy lets you benefit from potential price drops to the $55-$60 range while clearly limiting your risk. Traders using futures should consider shorting the front-month contract, making sure to implement disciplined stop-loss orders to protect against sudden changes from geopolitical news. This report may also push the futures curve further into contango, making bearish calendar spreads a smart strategy. This involves selling the front-month contract and buying a later contract to profit from the growing price difference. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now