Private oil stock data from the American Petroleum Institute (API) indicates expected changes in US oil inventories ahead of the official government report. Forecasts suggest a rise of 1.4 million barrels in crude oil, 0.3 million barrels in distillates, and a decline of 1.5 million barrels in gasoline.
The official report from the US Energy Information Administration (EIA) will be released on Wednesday morning. The EIA report is recognised for its detailed statistics, including refining inputs and outputs, and is regarded as more precise and comprehensive compared to the API survey.
Api And Eia Estimates
API estimates suggest that crude inventories are likely to build moderately, with a much smaller increase seen in refined products, while gasoline stockpiles are set to fall once more. If the EIA confirms these changes with similar figures, markets may respond by shifting expectations on seasonal trends and refining throughput.
The difference in stock movements hints at refineries continuing to run near current utilisation levels, possibly nudged higher to meet near-term demand. If so, the narrowing gap between production and consumption might give short-term direction to spreads in products like gasoline and heating oil. On the other side, rising crude inventories may point to a temporary misalignment with refinery intake or perhaps to a recent slowdown in export activity.
We’ve seen this pattern emerge before in transitional months. When gasoline levels fall even as crude rises, it often points to late-cycle consumption holding firm into autumn, or to exports absorbing more supply than usual. That places more weight on the refining margins, which could tighten if product stocks continue to be drawn down at this pace.
The timing matters too. With WTI recently finding support around the $80 level, inventory builds in crude should act as a brake on any upward momentum — unless soft data appears elsewhere to shift expectations on broader supply-demand balances. Short-dated contracts may therefore be more volatile if API and EIA figures diverge noticeably, especially if refinery inputs or implied demand come in well above average.
Implications For Traders
In navigating these figures, we tend to emphasise the moving pieces rather than static outcomes. If refinery runs increase but gasoline supplies still dwindle, then backwardation in near-month gasoline contracts should steepen. Conversely, steady builds in crude could soften time spreads if consumption indicators do not keep pace. These positionings will not hold long unless validated with more consistent data over multiple weeks.
Stepping back, the focus remains on how quickly stocks are being drawn or accumulated: not just the direction, but the rate. If all product builds remain modest but consistent week over week, product crack spreads might compress unless underpinned by improved margins. If, however, the draw in gasoline stays steep, that should offer some foundation to keep nearby product pricing resilient, even if crude wavers around current levels from shifting inventories.
Traders should be sensitive to outliers in the government report such as changes in net imports, refinery utilisation, and product supplied. These tend to precede shifts in positioning before price adjusts. Whipsaw action is not unusual in such setups, particularly around unexpected weekly inventory shifts.
Reading the reports closely side by side helps to establish confidence in the numbers. When we see two weeks of aligned movements in the same direction from both API and EIA, it reinforces the underlying signal — whether it’s accumulation or depletion. Standalone prints are less reliable, and trading on them alone can invite broader missteps.
Bond markets and the dollar should also be monitored in parallel, as any moves that affect the forward interest rate curve can alter how risk is priced into energy markets — a stronger dollar, for instance, can suppress pricing even amid bullish draws. These offsetting forces often muddle expected outcomes, making it vital to reassess weekly.
What we’ll be watching is whether the implied demand on the EIA report starts to overtake last year’s levels, or if refinery runs begin to outpace seasonal averages. Either shift would signal a tightening backdrop incompatible with continued stock builds. That would bring further attention to the near-dated futures structure and prompt further recalibration across the curve.
