Oil Prices Dip Despite Inventory Surprises.

Oil prices took a hit recently, continuing a downward trend that started with the announcement of new tariffs. This drop happened even though there was a significant decrease in U. S. oil inventories, as reported by the American Petroleum Institute. The API noted a large draw of 4. 565 million barrels in U. S. crude oil inventories. This drop was unexpected, given that the driving season in the U. S. had not even begun. The U. S. Energy Information Administration released its own data, showing a different picture. According to the EIA, U. S. crude oil inventories actually increased by 200, 000 barrels during the week ending April 18. This increase was a surprise, as many had expected a decrease in inventories. The EIA also reported that gasoline inventories decreased by 4. 5 million barrels, with daily production increasing to an average of 10. 1 million barrels. This was a significant drop from the previous week, when inventories decreased by only 2 million barrels. The EIA's report also included data on middle distillates, which saw a decrease of 2. 4 million barrels. Daily production for middle distillates decreased to an average of 4. 6 million barrels. This was a drop from the previous week, when production stood at an average of 4. 7 million barrels daily. Distillate inventories are now 13% below the five-year average for this time of year, which could indicate a tighter supply in the coming months. The price of Brent crude oil was trading down by $1. 10 per barrel, or 1. 63%, at $66. 34. WTI crude oil was also trading down by $1. 13, or 1. 77%, at $62. 54 per barrel. These price drops came despite the significant decreases in gasoline and distillate inventories. This raises questions about what is driving the price drops, and whether the market is overreacting to the news of new tariffs. Total products supplied over the last four weeks were up week over week for the first time in five weeks, averaging 19. 9 million barrels per day. This was a 0. 4% increase from this time last year. Distillate products supplied over the last four weeks are up 12. 8% compared to this time last year, while gasoline products supplied were down 0. 4% from the same period last year. This data suggests that demand for distillates is strong, while demand for gasoline is lagging. The recent price drops in oil raise important questions. Why are prices falling when inventories are decreasing? Is the market overreacting to the news of new tariffs? Or is there another factor at play? These are questions that investors and analysts will be watching closely in the coming weeks and months. It is important to remember that the oil market is complex and influenced by many factors. It is not always easy to predict how prices will move, and surprises can happen.