U.S. crude oil futures saw a boost in post-settlement trading on Tuesday following the American Petroleum Institute’s (API) weekly report, which revealed a smaller-than-anticipated increase in domestic crude stockpiles. The news provided a lift to oil prices, as traders reacted to the data suggesting tighter supply conditions than initially expected.
Market Reaction and Price Movement
Crude Oil WTI Futures, the U.S. benchmark, climbed to $73.97 a barrel in post-settlement trading after the API report was released. This followed a 0.8% increase during the regular session, where prices settled at $73.77 a barrel. The upward movement reflects market sentiment that crude supplies are not growing as rapidly as analysts had predicted.
API Inventory Data Breakdown
According to the API, U.S. crude inventories rose by approximately 2.9 million barrels for the week ending January 24. This figure came in below economists’ expectations of a 3.7 million barrel build and was also higher than the previous week’s increase of 1 million barrels. The smaller-than-expected rise in crude stocks suggests stronger demand or tighter supply conditions, which typically support higher oil prices.
In addition to crude oil, the API reported a mixed picture for refined products. Gasoline stockpiles increased by about 1.9 million barrels, indicating a potential oversupply in the motor fuel market. On the other hand, distillate inventories, which include diesel and heating oil, fell by 3.8 million barrels. The decline in distillate stocks could signal stronger demand for heating oil amid colder weather or increased industrial activity.
Focus Shifts to EIA Report
While the API report provides an early snapshot of inventory trends, the market is now turning its attention to the official government data from the Energy Information Administration (EIA), scheduled for release on Wednesday at 10:30 a.m. ET (1530 GMT). The EIA report is considered more authoritative and could either confirm or contradict the API’s findings. Traders will be closely watching for any surprises in crude, gasoline, or distillate inventories, as these could influence price movements in the coming days.
Implications for the Oil Market
The smaller-than-expected crude inventory build reported by the API has provided temporary support to oil prices, but the market remains sensitive to broader factors such as global demand trends, geopolitical developments, and OPEC+ production policies. The ongoing balance between supply and demand will continue to dictate price direction in the near term.
If the EIA report aligns with the API data, showing a smaller crude build and a significant draw in distillate stocks, it could further bolster prices. However, any deviations, such as a larger-than-expected crude inventory increase or weaker demand for refined products, could weigh on the market.
Conclusion
Tuesday’s API report offered a bullish signal for oil prices, with crude futures edging higher in response to the smaller-than-anticipated inventory build. As the market awaits the EIA’s official data, traders will be evaluating the broader supply-demand dynamics and their potential impact on oil prices. For now, the focus remains on whether the inventory trends will sustain the recent upward momentum or if new data will introduce fresh volatility into the market.
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