SunSirs: API Reports Significant Drop in U.S. Crude Oil Inventories

On Wednesday, data released by the American Petroleum Institute (API) showed a decline in U.S. crude oil and distillate inventories for the previous week, while gasoline inventories saw an increase. For the week ending October 9, U.S. crude oil inventories fell sharply by 11.1 million barrels. Gasoline inventories rose by 1.1 million barrels compared to the prior week, while distillate inventories decreased by approximately 1.5 million barrels.

The API’s report of an 11.1-million-barrel drop in U.S. crude oil inventories significantly reinforces expectations of tightening supply, providing strong bullish support for both spot and futures prices of crude oil. Despite a slight increase in gasoline inventories, the overall impact remains positive.

Liquefied Petroleum Gas (LPG) is a downstream chemical product derived from crude oil; expectations of rising crude prices are strengthening its cost-side support. Recently, LPG futures contracts have generally trended upward, providing a boost to both spot and futures prices.

Crude oil is a core upstream raw material for styrene; the prospect of higher oil prices is bolstering its cost support. Recently, the main styrene futures contracts have seen growth in both trading volume and open interest, with a strong price trend that is favorable for its market value.

Polypropylene is also derived from crude oil; expectations of an upward trend in oil prices are strengthening its cost-side support. Recently, polypropylene futures contracts have generally moved higher, providing a positive boost to both spot and futures prices.

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