How to trade the
EIA report.

API preview: Tuesday 4:30 PM ET

The American Petroleum Institute releases its own inventory estimate the evening before the official EIA data. API data is based on voluntary member reporting - less comprehensive than the EIA's mandatory survey - but the directional signal is usually accurate. A large API crude draw on Tuesday frequently precedes an EIA draw on Wednesday. Many traders use the API preview to position ahead of the official release, though the API can diverge significantly from EIA in any given week.

1. Crude oil inventory change (commercial stocks)

The headline number. Reported as a weekly change in millions of barrels. A draw (inventories fell) = bullish - the market consumed more oil than was produced/imported. A build (inventories rose) = bearish - supply exceeded demand. Key thresholds: a draw larger than 3 million barrels is strongly bullish; a build larger than 3 million barrels is strongly bearish. Compare to both the analyst consensus AND the API preview for the full picture.

2. Cushing, Oklahoma storage levels

Cushing is the physical delivery point for WTI futures. Storage capacity is roughly 75 million barrels. Cushing draws are especially bullish for WTI because they signal tightening supply at the delivery point. If Cushing inventories approach tank bottoms, WTI can spike sharply as physical buyers scramble for barrels. Conversely, Cushing builds near capacity limits (rare) can pressure WTI to steep discounts. Cushing data is unique to WTI - Brent has no equivalent delivery-point storage metric.

3. Gasoline inventories

Gasoline is the most important refined product - it drives refinery demand for crude. A large gasoline draw during summer driving season (May-September) is bullish for crude because refineries must increase crude purchases to replenish gasoline stocks. A large gasoline build suggests weak consumer demand and can pressure crude even if crude inventories drew.

4. Distillate inventories (diesel/heating oil)

Distillates include diesel fuel and heating oil. Important during winter months when heating oil demand spikes. A low distillate inventory heading into winter is bullish for crude - refineries must run harder to produce heating oil. Distillate data is also a proxy for industrial activity: strong diesel demand signals strong trucking and manufacturing activity.

5. Refinery utilization rate

The percentage of US refinery capacity in operation. High utilization (90%+) means refineries are running hard - strong crude demand. Low utilization signals maintenance, outages, or weak product demand. A surprise drop in utilization is bearish for crude (less demand from refineries). A surprise jump is bullish. Utilization often dips during spring and fall maintenance seasons.

Pre-release: avoid holding full positions

In the 10 minutes before 10:30 AM ET, oil liquidity thins and spreads widen as market makers pull back ahead of the data. Do not hold full-sized positions into the release unless your stop is wide enough to absorb a 100-150 cent spike. Many traders reduce to 25-50% of normal size or flatten entirely. The pre-release position is the most common EIA trading mistake - being full-size and getting stopped out on the initial spike in the wrong direction before the real move develops.

At-release scalp: the 1-2 minute window

The initial reaction to the EIA data happens in the first 60-120 seconds. Compare the headline crude number to both the analyst consensus AND the API preview from Tuesday. When both agree and the EIA confirms (e.g., consensus expected -2M draw, API showed -2.5M, EIA comes in at -3M), the move is cleaner and more predictable. When they diverge (API showed a build but EIA shows a draw), the initial spike can reverse violently. At-release scalping requires an ECN broker with sub-1-cent spreads - standard accounts with 3-5 cent spreads cannot scalp EIA profitably.

Post-release trend: the 30-60 minute trade

After the initial spike and reversal, oil typically establishes a directional trend that persists for 30-60 minutes. This is the higher-probability trade window. Wait for the first 5-minute candle to close, then assess: Did oil hold above the pre-release level after a bullish surprise? Or did it fade back below? The trend trade is about confirmation - let the initial chaos clear, then position with the established direction. Stops can be tighter post-release because the data is known and the market has chosen a direction.

Combine with other EIA data for conviction

The strongest EIA trade setups come when multiple data points align. Example: a larger-than-expected crude draw + a Cushing draw + a gasoline draw + rising refinery utilization = a "clean sweep" bullish report. When all components point the same direction, the move tends to be larger and more sustained. When the report is mixed (crude drew but gasoline built heavily), the move is often choppy and prone to reversal. Wait for alignment across at least 3 of the 5 key data points for highest conviction.

EIA Short-Term Energy Outlook (STEO) - Monthly

Published the first Tuesday after the 6th of each month. Contains official EIA price forecasts for WTI and Brent, production estimates, and global supply/demand balance projections. The STEO sets the fundamental narrative for the weeks ahead. A downward revision to US production forecasts supports oil; an upward revision pressures it. The STEO is less of an immediate trading catalyst than the weekly report but more important for medium-term positioning.

Baker Hughes Rig Count - Friday 1:00 PM ET

The weekly US oil and gas rig count is a leading indicator for future production. Rising rig counts signal more drilling and higher future output (bearish). Falling rig counts signal declining future production (bullish). Combine the rig count trend with EIA production data: if rigs are falling but production is still rising (efficiency gains), the bearish impact is muted. If rigs and production both decline, supply tightness is building.

CFTC Commitments of Traders (COT) - Friday 3:30 PM ET

Shows positioning of commercial hedgers, large speculators, and small traders in crude oil futures. When speculative longs reach extreme levels, a reversal often follows (crowded trade unwinds). When commercial hedgers are heavily short, it signals producers are locking in prices - potentially capping upside. COT data is a lagging indicator (Tuesday snapshot released Friday) but valuable for identifying sentiment extremes.