Crude oil prices pulled back Tuesday following a surprising rise in U.S. crude inventories, tempering bullish sentiment in the market. According to the American Petroleum Institute (API), U.S. crude stockpiles unexpectedly rose by 4.287 million barrels for the week ending May 9. Analysts had previously forecast a draw of 2.4 million barrels, making the reported build a sharp deviation from expectations.
The API’s figures followed a reported draw of 4.49 million barrels in the previous week and contributed to a year-to-date increase of over 23 million barrels in crude oil inventories, based on Oilprice.com calculations.
Separately, the U.S. Department of Energy announced that the Strategic Petroleum Reserve (SPR) increased by 500,000 barrels last week, bringing total reserves to 399.6 million barrels. However, that figure remains several hundred million barrels below pre-withdrawal levels during the Biden administration’s emergency releases.
The unexpected crude build pressured oil prices despite recent gains driven by geopolitical developments and improving demand signals. As of 3:35 p.m. ET, Brent crude was trading at $66.61 per barrel, up $1.65 or 2.54% on the day and $4.50 higher than the previous week. West Texas Intermediate (WTI) rose $1.79 or 2.89% to $63.74 per barrel, reflecting a weekly gain of $3.70.
Meanwhile, gasoline and distillate inventories both fell, supporting refined product margins. Gasoline stockpiles declined by 1.374 million barrels, following a 1.97 million-barrel drop the previous week. According to the U.S. Energy Information Administration (EIA), gasoline inventories now sit approximately 3% below the five-year average for this time of year.
Distillate inventories, which include diesel and heating oil, fell by 3.675 million barrels this week, reversing a build of 2.24 million barrels the previous week. The EIA reported that distillate supplies are roughly 13% below the five-year seasonal average.
At the Cushing, Oklahoma delivery hub—a key location for WTI futures contracts—crude inventories declined by 850,000 barrels, extending the previous week’s draw of 854,000 barrels, according to the API.
The unexpected inventory data has introduced uncertainty into the market, as traders weigh the implications for demand recovery and broader macroeconomic conditions.
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