WTI Experiences a Dip Following the Largest Crude Inventory Increase Since April

Oil Prices Fluctuate

Oil prices experienced a roller coaster ride after two consecutive days of gains. WTI (West Texas Intermediate) dipped to $70 before bouncing back to $71.50 in anticipation of the morning's official inventory and supply data. The American Petroleum Institute (API) reported a mixed bag of data, which is likely still feeling the effects of recent hurricanes.

Inventory Data

The API reported the following:

• Crude: +1.64mm (+800k expected)
• Cushing: -216k
• Gasoline: -2.02mm (-1.3mm expected)
• Distillates: -1.48mm (-1.6mm expected)

Department of Energy Data

The Department of Energy (DOE) reported the following:

• Crude: +5.47mm (+800k expected)
• Cushing: -346k
• Gasoline: +878k (-1.3mm expected)
• Distillates: -1.14mm (-1.6mm expected)

Crude Stocks and Production

Last week, crude stocks surged by 5.5 million barrels, significantly exceeding expectations. Gasoline stocks also unexpectedly increased as gasoline inventories fell for the fifth consecutive week. This is the largest weekly increase since April, including the 760k barrels added to the Strategic Petroleum Reserve (SPR). This surge pushed total crude stocks to their highest level since August. Meanwhile, US Crude production remains at record highs of 13.5mm barrels per day.

Market Reactions

Following the release of the official data, WTI experienced a dip from rebound highs. Goldman Sachs analysts, including Yulia Zhestkova Grigsby, noted a shift in market focus back to the risks of oversupply in 2025 as concerns about Iran oil supply have eased. They highlighted that the downside price risks from high spare capacity and potential broader trade tariffs outweigh the upside price risk from geopolitical supply disruptions.

Bottom Line

The oil market is a complex and volatile entity, with numerous factors influencing prices. This recent data release shows a significant increase in crude stocks, which could potentially lead to oversupply risks. However, geopolitical factors and trade tariffs also play a significant role in shaping the market. What are your thoughts on these recent developments? Feel free to share this article with your friends and engage in a discussion. Also, remember to sign up for the Daily Briefing, which is available every day at 6pm.