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Oil Inventory Confusion

US crude oil inventories are currently at the forefront of short-term price swings, but traders should take these reports with a pinch of salt. Every Tuesday, the API releases its estimates of crude oil, gasoline, distillate, and Cushing inventory changes. The next day, the EIA does the same. There are other sources, too, including Tanker Trackers, which uses exports and production to calculate how much inventory has shifted. The US is largely considered the most transparent oil market to follow inventory moves, but all three sources differ, and many do not trust the data. This week should serve as a cautionary tale for those who do. The API this week supplied their inventory figures (which they charge a pretty penny for) at 4:30pm EDT. Within a few minutes, Twitter was awash with the figures. But some time later, the API sent out a second, corrected and contradicting set of figures. Some media outlets and analysts had already reported the first set and were unaware of another set released later. Latecomers to the Twitter party, on the other hand, reported the second set.

Meanwhile, the API was silent, and markets were confused. A day later, the EIA reported its inventory figures as well, which were different still, as they often are. TT had their own set of data. Again, different. While the data is readily available for tracking US crude inventories, it should not be assumed that this transparency is synonymous with accuracy. The API provides estimates. And the EIA…

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