US EIA crude oil stocks fell by 2.314 million in the week ending 1 May. The forecast was a fall of 2.8 million.
The crude inventory draw of 2.314 million barrels last week was less than what the market expected. This suggests that demand heading into the summer driving season might not be as robust as we initially thought. It tempers the bullish enthusiasm we’ve seen recently.
Demand Signals Into Summer
While forecasts for US summer travel remain strong, recent weekly gasoline demand has softened, creating a mixed signal. This is compounded by China’s latest manufacturing PMI from April, which at 50.4 showed slowing expansion and signals potential weakness from the world’s top crude importer.
On the supply side, all eyes are on the upcoming OPEC+ meeting in early June to see if production cuts will be extended. At the same time, the Baker Hughes report shows US oil rig counts have been slowly increasing, hinting that more supply could be coming online.
We remember how prices rallied sharply this time in 2025 as the summer season took hold, which might keep traders from getting too bearish.
Options Strategy For WTI
Given the current uncertainty, selling out-of-the-money call options on WTI futures seems like a prudent strategy. This allows us to collect premium while betting that prices will struggle to break significantly higher in the near term.
