API Report Fuels Bearish Sentiment Ahead of EIA Data
Traders reacted to American Petroleum Institute (API) data showing a surprise 4.3 million barrel build in U.S. crude inventories for the week ended May 9. The uptick added selling pressure, countering the broader rally seen earlier this week. While gasoline and distillate stocks showed significant draws—down 1.4 million and 3.7 million barrels respectively—the headline crude build dominated early sentiment.
Market attention now shifts to official inventory figures from the U.S. Energy Information Administration, due later Wednesday. A Reuters poll suggests crude and gasoline stocksgasoline stocks likely declined, but expectations of a distillate build could temper bullish interpretations. With the summer driving season approaching, product demand trends will be critical for gauging supply tightness.
Product Draws Hint at Underlying Support, But Profit-Taking Kicks In
Despite the bearish tilt from the crude stock build, analysts noted that large draws in refined products signal supply tightness in the oil complex. Roth Capital Markets pointed to the product declines as evidence of an undersupplied market, potentially offering longer-term support for prices.
Still, the recent rally in crude benchmarks to two-week highs has prompted profit-taking. UBS analyst Giovanni Staunovo highlighted this factor, noting that traders may be unwinding positions after recent strength in oil prices.
OPEC Report in Focus as Supply Signals Take Center Stage
Market participants are also awaiting OPEC’s monthly report, expected later Wednesday. Analysts are focused on secondary source data for supply estimates, which could offer fresh insight into how disciplined production cuts are holding across member states.
With prices failing to push past the 50-day moving average and supply data offering mixed signals, bulls appear hesitant to commit. A sustained break above $63.80 could revive upside momentum toward the 200-day moving average at $67.58, but that scenario requires a meaningful bullish catalyst—potentially from EIA data or OPEC figures.
