Logout
Are you sure you want to exist?

Understanding Crude Oil API Data

Beginner commodity traders should never underestimate the role of crude oil price, as it may define the overall economic health and performance potential in the long run. What’s more, investors must take into account the fact that inflation always moves in the same direction with the oil price bouncing up and down.

None

People utilize oil energy in many spheres and industries. We use it for heating as well as for transportation and manufacturing. As a result, the rise of the oil price inevitably leads to the consumer products price increase not to mention the living and transportation costs. To predict the situation on the market, traders can use these factors when trading not only commodities or crude oil in particular but also stocks and other assets.

This is where opting for crude oil API data will be a good solution. It delivers an inner market overview along with the Fed adjusting limitations and interest rates used to stop the inflation. In this review, we will explain what data is collected and shared by the American Petroleum Institute, as well as how traders may use it in their favor.

Introduction to Understanding Crude Oil API Data

As stated earlier, API stands for the American Petroleum Institute. It represents a group of US-based companies that regularly share crude oil reports with prices, insights, and other important data. The companies involved take part in oil refining, manufacturing, and distributing. Some of them specialize in petroleum products while others handle all phases of the oil production from the downstream to the upstream.

Industry-best trading conditions
Deposit bonus
up to 200% Deposit bonus 
up to 200%
Spreads
from 0 pips Spreads 
from 0 pips
Awarded Copy Trading platform Awarded Copy Trading platform
Join instantly

Established in 1919, the API consists of more than 600 companies and members. The main mission is to generate relevant data and stats. Local experts provide in-depth research in accordance with the industry standards to ensure maximum accuracy.

The turning point for the API appeared to be the introduction of a so-called Weekly Statistical Bulletin back in 1929. It comes with piles of information and figures that refer to oil manufacturing, refining, and distributing operations. It covers some other factors including import and export of some major petroleum products:

  • Gasoline for motor vehicles.
  • Jet fuel kerosene.
  • Residual fuel oil.
  • Distillate oil, etc.

The main benefit for investors is the fact that the bulletin covers more than 80% of total oil manufacturing and refining.

How Crude Oil API Data Works

The process consists of several stages. First of all, API experts collect information from all companies involved no matter if they are members of the API or not. At the next stage, generated data gets to the EIA. At this step, both agencies are supposed to confirm the data. Professional traders consider EIA reports to be more accurate compared to API. But this is a matter of experience.

Note: if you want to access the report, you need to follow the official bulletin release that takes place every Tuesday at 4:30 p.m. Eastern Time.

The Key Challenges of Using Crude Oil API Data

With the generated data, traders have an opportunity to overview the energy market and analyze the situation around the world. It is very important to consider the following factors:

  1. Geopolitical tensions.
  2. Seasonal effect (cold winter and driving summer).
  3. Refinery outages.
  4. Important events taking place not only in the United States but also globally.

Political issues may be the dominating force when it comes to oil and stock trading. If you are able to maintain this particular knowledge, the process of oil refinery and manufacturing will be quite clear. The bad news is that both reports conducted by API and EIA are not as accurate as some traders expect them to be. 

So, you should not be surprised to see higher supply inventories compared to what you have expected. Here we have an example of a bearish signal. If the supply is weaker than you expected, the demand will grow stronger.