API Report Reveals Massive Crude Build, Unexpected Surge in Inventories

Core Insights - U.S. crude oil inventories unexpectedly increased by 13.4 million barrels for the week ending February 7, 2026, defying market expectations for a smaller increase or even a draw [2][8] - Gasoline inventories rose by 3.3 million barrels, indicating potential softening demand for refined products, contrary to earlier forecasts [3][8] - Distillate stockpiles, including diesel and heating oil, saw a draw of 2.0 million barrels, aligning with analyst expectations for a decline [4][8] - The primary crude oil storage hub in Cushing, Oklahoma, experienced a rise in stocks by 1.4 million barrels, contributing to the overall inventory build [4][8] Market Implications - The API data serves as a precursor to market sentiment, with oil futures already under downward pressure prior to the inventory figures [5] - Geopolitical tensions, particularly regarding Iran, and past supply disruptions have supported oil prices, but the unexpected inventory build may shift focus towards demand concerns [5] - Investors in energy-related exchange-traded funds, such as the United States Oil Fund (USO) and the Energy Select Sector SPDR Fund (XLE), are closely monitoring the upcoming official EIA report for confirmation and market direction [5]