US Crude Inventories
Learn how US crude inventory reports move markets, what components matter, and how to trade surprises responsibly. Includes diagrams and checklist.
Table of contents
Key takeaways
- Inventory reports move price mainly through surprise.
- The components explain the ‘why’ (runs, exports, imports).
- In tight markets, bullish draws tend to matter more than bearish builds.
Visual map
Use the diagrams to translate the narrative into a simple question: what changed versus expectations, and does it make the market tighter or looser?
Key concepts (with meaning and application)
Each concept is written as a practical trading tool: definition → why it moves prices → how you use it.
Headline crude change
What it means: The weekly build (increase) or draw (decrease) in crude stocks.
Why it matters: Draws signal tighter balance; builds signal looser balance—especially if persistent.
How to apply it: Trade the surprise vs consensus, but verify with components to avoid false signals.
Refinery utilisation (runs)
What it means: How much crude refineries are processing.
Why it matters: Higher runs can draw crude but may build gasoline/distillates if end-demand is weak.
How to apply it: If crude draws only because runs spike, cross-check products to judge whether it’s truly bullish.
Net imports / exports
What it means: How much crude is coming in versus leaving the country.
Why it matters: Exports can draw crude even if domestic demand is flat; imports can build crude even if demand is strong.
How to apply it: When exports are unusually high, treat a draw as less durable unless it persists.
Cushing and regional bottlenecks
What it means: Stocks at key hubs can reflect logistics, not only fundamentals.
Why it matters: Bottlenecks can create local tightness and spread moves.
How to apply it: Use hub and region data to interpret spread behaviour and WTI structure.
How to apply this to trading
How to apply this as a trader
- Before release: note consensus expectations and market positioning.
- On release: classify the surprise (bigger draw/build than expected).
- After the headline: check drivers (runs, exports, imports) to judge durability.
- Confirm via price structure (backwardation/contango) and follow-through.
Example
A headline draw that is driven by a one-off export spike can fade. A draw driven by sustained demand plus steady exports tends to have more follow-through.
Common mistakes
- Trading the headline without checking components.
- Confusing temporary logistics moves with genuine demand/supply change.
- Ignoring products (gasoline/distillates) which can signal demand weakness.
- Oversizing around releases when spreads widen and slippage increases.
FAQ
Why do prices sometimes ignore a draw?
Because the draw was expected, or the components were bearish, or macro risk-off dominated.
What is the most ‘tradable’ part of the report?
Often the surprise vs consensus, plus any unusual changes in exports, imports or refinery runs.
Should I trade every weekly release?
No. Many releases are noisy. Focus on periods where the market is tight and the surprise is meaningful.
Summary
- Commodity prices are driven by supply, demand, inventory, and expectations.
- Watch the key marginal driver: production decisions, storage, weather, and global growth.
- Manage risk around scheduled reports and sudden supply shocks.
Last updated: 2025-12-28 (UK time).