Inventory Reports (EIA, API) and Price Impact

Every Wednesday at 10:30 AM Eastern, oil prices move. That's when the US Energy Information Administration releases its weekly petroleum status report—the most closely watched inventory data in global energy markets. Traders compare actual inventory changes to expectations, and prices adjust within seconds. The point is: understanding these reports helps you interpret why oil prices move on any given day and what the data signals about supply and demand.

Two Reports, One Market

Two organizations publish weekly US petroleum inventory data:

API (American Petroleum Institute)

• What it is: Industry trade group representing oil and gas companies
• Data source: Voluntary surveys from member companies
• Release time: Tuesday evening, approximately 4:30 PM Eastern
• Status: Unofficial, but closely watched as a preview of official data

EIA (Energy Information Administration)

• What it is: Government statistical agency within the Department of Energy
• Data source: Mandatory reporting from refiners, importers, pipeline operators
• Release time: Wednesday, 10:30 AM Eastern (except federal holidays)
• Status: Official US government data; considered more accurate

The relationship: API data releases first and often moves prices in after-hours trading. EIA data confirms or contradicts the API report the next morning. When API and EIA differ significantly, the EIA number is treated as authoritative.

What the Reports Include

Both reports track inventories of crude oil and refined products across the US. Key data points:

Crude oil inventories

• Total commercial crude stocks (excluding Strategic Petroleum Reserve)
• Cushing, Oklahoma stocks specifically (the WTI delivery point)
• Net imports and exports

Refined product inventories

• Gasoline stocks (finished and blending components)
• Distillate fuel oil stocks (diesel, heating oil)
• Jet fuel, residual fuel, and other products

Refinery data

• Crude inputs to refineries (barrels per day processed)
• Refinery utilization rate (percentage of capacity in use)
• Production of gasoline, distillates, and other products

Demand estimates

• Product supplied (proxy for demand)
• Implied demand for gasoline, distillates, jet fuel

How Markets React

The setup: Before each release, analysts and traders estimate expected inventory changes. Bloomberg, Reuters, and other services publish consensus estimates.

Builds vs. draws:

• Build: Inventories increased (supply exceeded demand)
• Draw: Inventories decreased (demand exceeded supply)

Market reaction pattern:

The magnitude matters: A 2-5 million barrel change in crude inventories is typical. Deviations from consensus by 2+ million barrels often trigger noticeable price moves. Changes exceeding 5 million barrels in either direction are unusual and typically move prices by 1-3% or more.

Sample scenario:

• Consensus estimate: crude inventory build of +1.5 million barrels
• Actual EIA report: crude inventory draw of -3.2 million barrels
• Surprise: -4.7 million barrels (much more bullish than expected)
• Likely reaction: WTI and Brent prices rise immediately after release

Beyond the Headline Number

Experienced traders look beyond the crude inventory headline:

Cushing stocks specifically

• Cushing is the delivery point for WTI futures
• Low Cushing stocks (below 25 million barrels) tighten the WTI market
• High Cushing stocks (above 50 million barrels) pressure WTI prices
• Cushing has approximately 90 million barrels of total capacity

Gasoline and distillate inventories

• Gasoline matters most in spring/summer (driving season)
• Distillates matter in fall/winter (heating oil demand) and year-round (diesel for trucking)
• Product inventory draws often signal strong economic activity

Refinery utilization

• Normal range: 90-95% during peak operations
• Below 85%: Significant outages or weak product demand
• Turnaround season (spring and fall) typically sees lower utilization

Crude imports and exports

• Rising exports suggest strong global demand for US crude
• Falling imports can indicate domestic production strength or weak refinery demand

Common Pitfalls

Pitfall 1: Overreacting to single-week data Weekly data is volatile. Weather, refinery outages, shipping schedules, and data revisions all create noise. Look at 4-week moving averages to identify trends rather than reacting to each release.

Pitfall 2: Ignoring seasonality Inventory levels follow predictable seasonal patterns. Gasoline stocks typically build in winter (lower driving demand) and draw in summer. Compare current levels to the 5-year average for the same week to assess whether inventories are truly high or low.

Pitfall 3: Focusing only on crude Product inventories often matter more for near-term prices. Tight gasoline stocks ahead of Memorial Day will pressure prices even if crude inventories are ample.

Pitfall 4: Missing the revision EIA revises prior week's data in each new report. Sometimes the revision is larger than the current week's change. Check the revision before interpreting the new number.

Reading the Report: Practical Tips

Where to find the data:

• EIA website: www.eia.gov/petroleum/supply/weekly/
• API data: Published via news services (Reuters, Bloomberg)

Key table to check first: Table 1 (Summary of Weekly Petroleum Data for the United States)

What to scan:

1. Crude oil stocks (commercial) vs. prior week
2. Cushing stocks vs. prior week
3. Gasoline stocks vs. prior week
4. Distillate stocks vs. prior week
5. Refinery utilization rate
6. Crude oil imports and exports

Comparative benchmarks:

Why This Report Matters

For oil traders: The inventory report is the highest-frequency official data on US supply/demand balance. It moves prices and informs positioning.

For energy investors: Inventory trends signal refinery health, product demand, and infrastructure constraints. Persistent builds suggest oversupply; persistent draws suggest tightness.

For macro watchers: Product demand (especially gasoline and diesel) tracks economic activity. Strong demand implies healthy consumer spending and freight movement.

For refinery analysts: Utilization rates and product output reveal refinery margins and operational status. Low utilization during peak season may indicate outages or weak product crack spreads.

Monitoring Checklist

Use this checklist each Wednesday:

• Note consensus estimate before 10:30 AM release
• Compare actual crude inventory change to estimate (build or draw?)
• Check Cushing stocks specifically (rising or falling?)
• Review gasoline and distillate inventory changes
• Note refinery utilization (normal range or notable deviation?)
• Compare inventories to 5-year average for the same week
• Check for revisions to prior week's data

Interpretation rules of thumb:

• Crude draw of 3+ million barrels with product draws: Bullish signal
• Crude build of 5+ million barrels with rising Cushing: Bearish signal
• Product draws amid high refinery runs: Strong demand signal
• Low refinery utilization with product builds: Weak demand or margin concern

Key Takeaways

1. Two reports, one truth: API (Tuesday evening) previews the EIA (Wednesday 10:30 AM). EIA is official and considered more accurate.

2. Builds are bearish; draws are bullish. Prices move based on actual vs. consensus expectations.

3. Typical weekly change: +/- 2-5 million barrels for crude. Changes exceeding 5 million barrels in either direction are unusual.

4. Look beyond the headline. Cushing stocks, product inventories, and refinery utilization often matter more than total crude stocks.

5. Seasonality and trends matter more than single weeks. Compare to 5-year averages and watch 4-week moving averages rather than reacting to weekly noise.

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Related: Oil Market Structure: Brent vs. WTI | Energy Supply Chain from Wellhead to Pump | Crack Spreads and Refining Margins