EIA Crude Oil Stocks Change Surprises with Smaller Than Expected Drawdown

The US Energy Information Administration (EIA) released its weekly crude oil stocks change report for September 4, revealing a surprise decline in inventories. The headline number showed a decrease of -0.391 million barrels, which was significantly less than the expected drawdown of -1.6 million barrels.

This report is closely watched by market participants, as it can have a significant impact on oil prices. However, history suggests that the initial reaction to the report may not be sustained. According to the source, the usual sequence is an initial knee-jerk in the front of the WTI curve followed by reassessment as desks reconcile the print against the API estimate released the evening before.

A large divergence between the two surveys has often amplified the move, but it's also been known to fade or reverse once the internals are parsed. The report notes that refinery utilisation and production levels frame whether the miss is supply- or demand-side in origin.