Yesterday, the American Petroleum Institute (API) released a critical US crude inventory report that caught the market off guard with its uniformly bearish surprise.
Key API data snapshot (for the week ending January 9, 2026):
Crude oil: A hefty build of +5.27 million barrels, wildly overshooting expectations that ranged from a -1.4 million draw to a modest +2 million rise.
Gasoline: A substantial surge of +8.23 million barrels.
Distillates: A notable increase of +4.34 million barrels.
In Cushing, Oklahoma, stocks grew by +945,000 barrels.
However, despite a classic case of higher inventories pushing prices down, oil rallied by more than 2.5%. All eyes are now on today's official Energy Information Administration (EIA) report to see if it confirms or denies this bearish reality.
In fact, geopolitical tailwinds outweigh an inventory glut. The recent fuel rally was driven by two simmering crises:
Iran: Escalating protests coupled with President Trump's announcement of 25% tariffs on nations trading with Iran have sparked fears of a supply disruption affecting roughly 3.3 million barrels per day.
Venezuela: Continued instability following the US military intervention maintains a persistent risk premium, though future sanctions relief could eventually add 150,000–450,000 barrels per day (bpd) to the market.
On the flip side, OPEC+ has provided a short-term floor for quotes by reaffirming its production freeze through March 2026, which deliberately offsets current soft demand.
Notwithstanding the rally, the structural outlook remains circumspect. Major forecasters like the EIA and Goldman Sachs anticipate lower prices ahead, citing a projected global supply surplus.
From a technical standpoint, Brent crude is unbalanced, trading below a key level that requires retesting to reestablish equilibrium between buyers and sellers. This sets the stage for a pullback toward $64.20. A decisive move below the mentioned threshold could accelerate the decline toward $62.50.
The ultimate recommendation is to sell Brent crude. Lock in profits at $64.20. Place Stop Loss at $66.70.
Calculate your open position so that a potential loss (protected by a Stop Loss order) is limited to 1% of your deposit. If your account balance does not allow entering a position of this size, it is better to skip the trade and wait for other market signals that meet low-risk criteria.
This content is for informational purposes only and is not intended to be investing advice.
