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Crude Oil Is Volatile and API Inventory Data Are Mixed This Morning

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Crude oil is volatile this morning

After starting this week on a weaker note and declining for two consecutive trading days, crude oil looks volatile on Wednesday morning. At 6:18 AM EST, the West Texas Intermediate crude oil futures contract for June delivery was trading at $43.62 per barrel—a loss of 0.07%. Brent crude was trading at $44.99 per barrel—a gain of 0.04%. The fears of oversupply from Middle East producers and the slightly stronger dollar are weighing on crude oil prices.

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Mixed API weekly US stock data

The API (American Petroleum Institute) released its weekly US crude oil stock data on May 3. According to the latest weekly data, the inventory witnessed a build of 1.27 MMbbls (million barrels). This is higher than the Market’s expectations of 0.5 MMbbls. Even though the build in inventories must pull the oil prices down, the better-than-expected drawdown in refined products supported oil prices.

Drawdowns in refined products and build in Cushing

Distillates stocks witnessed a healthy drawdown of 2.6 MMbbls. Gasoline stocks fell by 1.17 MMbbls. These drawdowns indicated strong demand for refined products. This supported crude oil prices. Apart from these drawdowns, the build of 382,000 barrels of Cushing stocks also supported the sentiment. The API data are less than Genscape’s data on May 2. The data showed a build of more than 800,000 barrels at Cushing. Investors’ focus shifted to the US crude oil inventories data released by the U.S. Energy Information Administration. It’s scheduled to release at 10:30 AM EST today.

On May 3, crude oil prices fell because of the slightly stronger dollar and weak manufacturing purchasing managers’ index data from China—the second-biggest crude oil consumer. Oil producers QEP Resources (QEP), WPX Energy (WPX), Carrizo Oil & Gas (CRZO), and ExxonMobil (XOM) fell 4.6%, 10.2%, 7.2%, and 1.1%. The SPDR S&P Oil & Gas Exploration and Production ETF (XOP) fell 4.7% on May 3.

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