US weekly crude oil stocks, as measured by the API, moved from a fall of 4.4 million barrels to a fall of 1.79 million barrels.
The latest reading is dated 24 April. This shows a smaller weekly draw than the previous report.
Api Draw Slows Sharply
The latest API data shows the weekly draw on crude oil inventories has slowed considerably, moving from -4.4M to -1.79M barrels. This suggests that the supply-demand balance is not as tight as it was in previous weeks. For derivative traders, this is a signal that the recent upward momentum in oil prices may be weakening.
We will be watching this week’s official EIA inventory report very closely for confirmation of this trend. Current U.S. crude production is holding strong near 13.1 million barrels per day, a factor that could easily tip inventories into a build if demand falters. A confirming number from the EIA could put significant downward pressure on WTI futures.
Looking at the demand side, finished gasoline inventories have seen surprise builds in recent weeks, indicating that consumer demand heading into the summer driving season might be softer than anticipated. This is a notable shift from the robust demand trends we observed throughout most of 2025. This lagging consumer activity supports a more bearish outlook on crude prices.
In response, we should consider strategies that benefit from flat or falling oil prices. Selling out-of-the-money call credit spreads on WTI futures for June or July expiration could be a prudent way to capitalize on this potential price ceiling. This strategy allows us to profit if the price of oil stays below a certain level.
Risk Premium Meets Softer Fundamentals
This fundamental data shift is important, especially since oil prices have been elevated due to ongoing geopolitical risk premiums, similar to the tensions we saw in the Middle East back in 2024. A weakening supply and demand picture makes those high prices harder to justify. Any easing of international tensions could now cause a more pronounced sell-off.
Furthermore, recent global manufacturing PMI data has been mixed, particularly out of Europe, raising concerns about a broader economic slowdown. A slowdown would directly impact future energy consumption forecasts, giving traders another reason to anticipate less demand pressure. We believe these macroeconomic headwinds are becoming more difficult for the oil market to ignore.
