U.S. energy data suggest waning demand for petroleum-based products

March 1 (UPI) -- A proxy for petroleum demand in the U.S. economy is well below year-ago levels and commercial inventories of crude oil are bloated, suggesting waning demand, data show.

The U.S. Energy Information Administration, part of the Energy Department, showed Wednesday that commercial crude oil inventories as well as the total amount of refined petroleum product supplied to the market over the seven-day period ending Feb. 24 were down from the same period last year.

Commercial crude oil inventories, not counting what's stored in the nation's strategic reserves, increased by 1.2 million barrels from the previous seven-day period. At 480.2 million barrels, commercial inventories are about 9% above the five-year average for this time of year.

The total amount of refined petroleum products supplied to the market, a proxy for demand, averaged 20.1 million barrels per day during the four-week period ending Feb. 24, a level that's 7.4% below levels over the same period last year.

Waning demand may be a result of lingering inflationary pressures as well as the severe winter storms that have occurred throughout February.

A late-winter storm brought a potent mix of wind, snow and rain across a wide swath of the central U.S. early Monday, with at least seven tornadoes causing widespread damage and a dozen injuries in Oklahoma. That followed an ice storm the previous week in Michigan, where tens of thousands of people are still without power.

Elsewhere, consumers continue to see elevated prices for everyday goods, while higher lending rates are creating headwinds in the housing market.

Commodity prices, meanwhile, remain below year ago levels.

The price for Brent crude oil, the global benchmark for the price of oil, was trading at around $84 per barrel on Wednesday, compared to $104.97 this time last year. Retail gasoline is fetching $3.36 per gallon nationally, according to AAA, down from $3.62 per gallon on this date in 2022.

Gasoline production, meanwhile, increased by just over 3% from the week ending Feb. 17 to average 9.7 million bpd. Refineries operated at about 85.8% of their peak capacity, more or less unchanged from the previous period.

Refineries should be on the verge of a busy period of seasonal maintenance, which would suggest activity suffers over the coming weeks.