The American Petroleum Institute (API) disclosed on Tuesday that U.S. crude inventories experienced a more pronounced decline than anticipated last week, signaling an uptick in demand.
Following the report, Crude Oil WTI Futures, the U.S. benchmark, traded at $78.45 a barrel, rebounding from its earlier settlement at $78.02 a barrel.
According to the API, U.S. crude stockpiles fell by approximately 3.1 million barrels for the week ending May 10. This marks a notable contrast to the 509,000 barrel build reported by the API for the previous week. Economists had anticipated a decrease of 1.1 million barrels.
Furthermore, the API data revealed a reduction of 1.3 million barrels in gasoline stockpiles, while distillate inventories saw an increase of 349,000 barrels.
These figures emerge amidst persisting bearish sentiments surrounding oil prices, with concerns revolving around the expansion of non-OPEC supply.
Macquarie, in a recent note, cautioned about the likelihood of oil entering a bearish phase post the second quarter. Factors contributing to this projection include non-OPEC supply growth, a reduction in OPEC+ spare capacity, and subdued demand attributed to lingering inflation concerns.
The official government inventory report is slated for release on Wednesday, providing further insight into the state of U.S. crude stockpiles.