Crude falls as API data shows fifth weekly US stock draw
Crude oil prices declined as API data revealed a fifth consecutive weekly draw in US inventories, while Trump's renewed optimism on ending the Iran war failed to offset supply concerns.
Crude oil prices edged lower on Wednesday as market participants weighed a fifth consecutive weekly draw in US crude inventories against renewed diplomatic rhetoric from President Trump, who stated that the war with Iran would end very quickly.
Data from the American Petroleum Institute (API) showed US crude stocks fell by 9.1 million barrels in the week ended May 15, marking a fifth straight weekly decline. Gasoline inventories dropped by 5.8 million barrels, while distillate stocks fell by around 1 million barrels. The drawdowns underscore tightening supply conditions in the US, with the gasoline figure in particular drawing attention ahead of the official Energy Information Administration (EIA) report. Despite the inventory support, crude prices struggled to hold gains as traders remained cautious amid broader risk-off sentiment and hawkish central bank signals.
For forex traders, the interplay between oil prices and currency markets remains a key focus. A sustained decline in crude could weigh on commodity-linked currencies such as the Canadian dollar and Norwegian krone, while providing a tailwind for net oil importers like Japan and India. The US dollar, meanwhile, has been supported by expectations of further Federal Reserve tightening, which has kept pressure on risk-sensitive assets. NowPrice's real-time fx quotes show the USD/CAD pair hovering near recent highs, reflecting the dual drag from lower oil prices and a stronger greenback.
Looking ahead, the market will closely monitor the EIA's official inventory data due later today for confirmation of the API figures. Any deviation could trigger sharp moves in crude and related currencies. Additionally, traders will watch for further comments from Trump on the Iran situation, as well as upcoming central bank decisions from the Fed and other major economies. The combination of supply dynamics and geopolitical developments is likely to keep volatility elevated in both oil and forex markets in the near term.