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The U.S. Energy Information Administration (EIA) reported a 3.1 million barrel increase in crude oil inventories for the week ending April 3, far exceeding the projected 600,000 barrel rise. This marked the largest weekly increase since late 2020, while gasoline and distillate inventories declined by 1.6 million and 3.1 million barrels respectively. The data suggests weak domestic demand amid ongoing geopolitical tensions, particularly the U.S. conflict with Iran, which has already driven oil prices higher. For markets, the inventory build adds downward pressure on crude prices despite the geopolitical risk premium. Traders must balance this with OPEC+ supply discipline and seasonal demand fluctuations. The next EIA report on April 10 will be critical to assess whether the inventory surge is a temporary anomaly or a sign of sustained demand weakness.
