EIA Crude Oil Inventories Plummet, Fueling Rally in Crude Prices

The US Energy (EIA) reported a drop in crude oil inventories, which led to a surge in crude oil prices. For the week ended May 2, 2025,

inventories decreased by 2.032 million barrels, which is more than the 1.858 million barrel drop. A drop greater than this indicates strong demand, which is a boost for crude oil prices.

Supporting this, the American Petroleum Institute (API) had previously forecast a large inventory build of 4.49 million barrels, but data from the EIA showed a reduction in that. Gasoline inventories saw a modest 200,000

barrel draw, while distillate inventories fell by 1.1 million barrels, with distillate stocks now 13% below the five-year average. Total production made over the past four weeks averaged 19.8 million barrels per day, up 0.6% from last year, reflecting steady demand.

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Crude oil prices were trading slightly lower ahead of the EIA release, with Brent at $61.70 and WTI at $58.72 a barrel, reflecting some hesitation in the market due to macroeconomic concerns or geopolitical concerns. The

inventory decline has fueled optimism, as seen in posts on X, where users hailed the data as “bullish” and noted its potential to push prices higher.

Despite the rally, some resistance exists. Patterns suggest that the price rebound could stall after the decline, especially if demand signals, such as from China, remain mixed. Additionally, refinery maintenance and

seasonal trends could dampen further gains. Investors should keep an eye on dynamics including the upcoming EIA report and OPEC+ decisions for price momentum

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