Oil prices are under pressure due to a significant increase in crude and product inventories. The American Petroleum Institute (API) revealed a 5.27 million barrel build in US crude oil stocks for the week ending January 9, a notable rise from the previous week's decline of 2.8 million barrels.
The Department of Energy (DoE) further reported a steady increase in the Strategic Petroleum Reserve (SPR), with a 200,000 barrel rise to 413.7 million barrels for the same week. This growth is part of the US Administration's strategy to rebuild the national stockpile.
US production, however, took a dip during the week of January 2, dropping to 13.811 million bpd, a decrease from the previous week's 13.827 million bpd, as per the latest EIA data. Despite this, production is still 248,000 bpd higher than the same period last year.
As of 3:09 pm ET, Brent crude was trading up by a substantial 2.36%, reaching $65.38. This represents a $4 increase from the previous week, as the market reacts to President Trump's comments on Iranian protests and the Federal Reserve. WTI also saw gains, trading up by 2.47% to $60.97.
In addition to the crude oil build, gasoline inventories experienced a significant surge this week, increasing by 8.23 million barrels for the week ending January 9. This follows a 4.4 million barrel growth in the prior week. According to the latest EIA data, gasoline inventories are now 3% above the five-year average for this time of year. Tom Kloza, an independent oil analyst, highlights that historically, this period represents the lowest gasoline demand month.
Warning: Historically, this week marks the lowest gasoline demand month. Weekly EIA measurements for the past five years: 2025 - 8.325m/b/d; 2024 - 8.269m/b/d; 2023 - 7.558m/b/d; 2022 - 7.906m/b/d; 2021 - 7.532m/b/d. The average demand is 7.918 million b/d, indicating a potential ebb tide.
Distillate inventories also increased during the reporting period, gaining 4.34 million barrels, following a 4.9 million barrel rise in the previous week. As of the week ending January 2, distillate inventories were still 3% below the five-year average, according to the latest EIA data.
The Cushing inventory, which is the delivery hub for the WTI Crude futures contract, saw a substantial rise of 945,000 barrels, building on the 700,000 barrel increase in the prior week.
And here's where it gets interesting: with these inventory builds and the potential ebb tide in gasoline demand, what does this mean for the future of oil prices? Will these trends continue, and how might they impact the global energy landscape? These are questions worth exploring further, especially with the ongoing discussions around climate investments and the role of oil and gas in the energy transition.
