WTI Crude Crashes Through $60 Floor—Traders Ignore EIA Draw as Demand Fears Bite
Oil bulls get steamrolled despite bullish inventory data—because nothing screams ’healthy economy’ like traders pricing in a global slowdown.
Subheader: The great oil paradox: Supply tightens while sentiment nosedives
Active traders dump contracts as manufacturing PMIs flash red across Asia. Meanwhile, the ’smart money’ quietly reloads tankers at fire-sale prices—because nothing fixes oversupply like demand collapsing faster than rigs can shut down.
Cynical finance jab: Just wait for the inevitable OPEC+ emergency meeting PowerPoint about ’market stability’ while princes liquidate another billion in US equities.
Recovery Stalls at Resistance
WTI crude had been in a steady downtrend since mid-January, bottoming out NEAR $55 per barrel in early April. A temporary reprieve came as trade tariffs were postponed, helping lift prices back up by around $10 in just two weeks. That rally was further fueled by expectations of tighter global supply and rising geopolitical tensions, briefly pushing prices toward the psychologically significant $65 level.
WTI Oil Chart Daily – Previous Support at $65 Turns Into Resistance
However, that zone, which once acted as firm support, has now turned into a barrier. As crude prices touched $65 again, upward momentum faded quickly, and the market began to reverse course.
Inventory Draw Fails to Halt Selloff
Despite a larger-than-expected draw in US crude inventories, as reported by the Energy Information Administration (EIA), the market failed to hold gains. Prices resumed their slide, and by today, WTI crude had slipped decisively below $60, signaling a breakdown in bullish sentiment.
Traders had hoped that signs of declining US stockpiles would inject some optimism, but broader concerns around demand, especially amid ongoing trade tensions, have taken precedence. The weakening outlook for global consumption is now overshadowing supply-side developments.
OPEC Meeting Looms Large
Looking ahead, oil markets are closely watching the upcoming OPEC+ meeting on May 5, where the cartel’s production strategy for the coming months will be clarified. Any decision to ease or maintain current output levels could significantly sway price direction.
With the trade war still dominating headlines and economic data pointing to mixed signals, crude oil’s next major move may depend less on inventories and more on macroeconomic factors and policy outcomes.
US Weekly Petroleum Inventory Report – Week Ending April 25, 2025
EIA (Energy Information Administration) Data:- Crude oil inventories fell by 2.696 million barrels, a sharp drawdown compared to the expected +429K build.
- Prior week’s figure was a +244K build.
- The unexpected decline suggests stronger-than-anticipated demand or reduced domestic production.
- Gasoline inventories saw a significant draw of 4.003 million barrels, well beyond the expected -1.031 million.
- Implies robust consumption ahead of peak driving season or tighter supply dynamics.
- Distillate inventories (including diesel and heating oil) rose by 937K barrels, contrasting the -1.566 million decline forecast.
- This increase may reflect soft industrial demand or a temporary supply glut.
API (American Petroleum Institute) Private Inventory Estimates (Reported Day Before):
- Crude stockpiles rose by 3.76 million barrels, diverging notably from the EIA’s reported draw.
- Gasoline inventories decreased by 3.14 million barrels, broadly confirming EIA’s report of a substantial draw.
- Distillate inventories declined by 2.52 million barrels, contradicting the EIA’s reported rise.
The weekly EIA data showed a larger-than-expected drop in crude and gasoline inventories, pointing to potentially tightening market conditions, despite contrasting signals from API figures. The divergence between public and private reports, particularly on crude, could lead to short-term volatility in oil prices.
Overall, the data hints at resilient gasoline demand and potential tightening ahead of the summer season, keeping traders on alert for further draws or supply bottlenecks.
Conclusion
WTI’s fall below $60 highlights the fragility of the recent rally and reflects deeper anxieties about global demand and geopolitical uncertainty. Unless demand prospects improve or OPEC signals a willingness to cut further, the path for crude could remain choppy through May.
