US weekly crude oil inventories rose by 11.4 million barrels in the week ending 20 February. This comes after a 0.609 million barrel decline the week before.
The numbers are from the American Petroleum Institute’s weekly report. The latest increase is much larger than the prior reading.
Crude Inventory Build Signals Oversupply
Crude inventories jumped by 11.4 million barrels last week. This is a big change from the small draw in the prior week and suggests the market is oversupplied. The near-term impact is likely bearish and could push oil prices lower.
This build comes as U.S. refinery utilization has fallen to about 86% due to seasonal maintenance. At the same time, domestic production remains strong, near a record 13.3 million barrels per day based on the latest government data. With refineries processing less and production staying high, inventories can rise quickly.
To position for potential price weakness, we may consider buying WTI put options or selling front-month futures. Bear put spreads for March and April expirations could be a lower-cost way to express a bearish view. This approach can profit from a moderate decline while limiting upfront cost.
A similar setup appeared in spring 2025, when refineries were slow to restart after turnarounds. Front-month crude prices fell more than 8% over the next two weeks before demand improved. That history suggests the current softness could last for several weeks.
The next focus is the official EIA inventory report. If it confirms a similarly large build, it could speed up the sell-off. We are also watching for a deeper contango, where later-dated contracts trade above the front month. This often signals strong supply and supports a bearish view.
Key Risks And Next Catalysts
Create your live VT Markets account and start trading now.
here to set up a live account on VT Markets now
