Oil prices increased due to a weaker US dollar, though ICE Brent remains below US$70 per barrel. Market response to external events, such as the US-brokered ceasefire in Ukraine, appears limited, with uncertainties surrounding Russian involvement.
According to the American Petroleum Institute, US crude oil inventories rose by 4.2 million barrels, exceeding the expected build of 2 million barrels. Meanwhile, Cushing crude oil and gasoline stocks decreased by 1.2 million and 4.6 million barrels, respectively, while distillate stocks saw a modest increase of 400,000 barrels.
Revised Surplus Estimates
The US Energy Information Administration (EIA) revised its surplus estimates for 2025 and 2026, lowering the expected surplus in 2025 from 500,000 barrels per day to 100,000 barrels per day. For 2026, the surplus forecast fell from 1 million to 500,000 barrels per day, with minor increases in US crude oil production estimates for both years.
The value of crude has climbed as the weaker dollar makes oil more attractive to buyers using other currencies. This has given prices some support, though the global benchmark is still under US$70 a barrel. While external influences such as the US-brokered ceasefire have the potential to drive market movements, we are not yet seeing a meaningful reaction. The uncertainty surrounding Russia’s stance appears to weigh on sentiment, keeping any price rally in check.
Industry data paints a mixed picture. Figures from the American Petroleum Institute show US crude stockpiles rising by 4.2 million barrels, far outweighing the 2-million-barrel increase analysts had anticipated. Surprisingly, storage levels in Cushing, a key delivery hub, fell by 1.2 million barrels. At the same time, petrol inventories saw a sharp drop of 4.6 million barrels, while distillate stocks crept up by 400,000 barrels. These shifts hint at a complex balance of supply and demand, with refiners drawing down stock even as broader crude inventories expand.
Market And Trading Implications
Fresh forecasts from the EIA suggest softer surpluses in the coming years than previously thought. The agency now sees an excess of just 100,000 barrels per day in 2025, down from an earlier estimate of 500,000 barrels. A similar trend appears in the 2026 projections, with the expected surplus cut in half to 500,000 barrels per day. Alongside these revisions, there have been slight adjustments to US production forecasts, pointing to a moderate increase. These figures highlight an oil market that is adjusting to shifting supply dynamics.
For traders focusing on derivatives, these developments provide a foundation for informed positioning. The weaker dollar is supporting prices, but the absence of a strong reaction to geopolitical events suggests that underlying fundamentals remain the dominant driver. With US inventories moving in different directions, caution is warranted when assessing near-term supply constraints. Meanwhile, the EIA’s downward revision of future surpluses indicates a market that may be tighter than previously assumed, which could have implications for long-term price trajectories.
