US crude oil inventories rise sharply: API data

U.S. crude oil inventories rose by 4.1 million barrels in the week ended May 10, according to data released late Tuesday by the American Petroleum Institute, a trade group. The unexpected build, reported by the API, contrasted with forecasts for a modest drawdown and sent benchmark oil prices lower in after-hours trading.

Analysts polled by Reuters had expected a decline of approximately 1.5 million barrels, underscoring the significance of the increase. The API report, which is released ahead of official government figures from the U.S. Energy Information Administration, provides an early indication of supply-demand trends in the world’s largest oil consumer.

The rise in inventories suggests potential oversupply in the domestic market, even as global demand remains resilient amid geopolitical tensions in key producing regions. West Texas Intermediate crude futures fell more than 1% following the API data, extending losses from earlier in the session. Brent crude, the global benchmark, also declined, tracking the downward move in WTI.

The API’s weekly inventory report is closely monitored by traders and policymakers for signals on inventory levels, refining activity and potential impacts on gasoline prices. The EIA is scheduled to release its own weekly petroleum status report on Wednesday, which will confirm the API’s findings and provide further clarity on market conditions.

Oil prices had been supported in recent weeks by supply constraints linked to OPEC+ production cuts and disruptions in shipping lanes, but the latest inventory data introduces a countervailing bearish factor.