U.S. energy data show a decline in demand

March 8 (UPI) -- Economic headwinds in the U.S. economy may be showing up as a significant decline in energy demand from year-ago levels, federal data from Wednesday show.

The U.S. Energy Information Administration, the statistical arm of the Energy Department, publishes weekly data on everything from refinery activity to crude oil imports.

Data from the seven-day period ending March 3 show total U.S. commercial crude oil inventories remain bloated. Though levels declined by 1.7 million barrels from the previous week, data show storage levels are 7% higher than the five-year average for this time of year.

That suggests the appetite for crude oil may be on the decline. The amount of total refined products supplied to the market during the four-week period ending March 3, meanwhile, averaged 19.7 million barrels per day. Market watchers use that data as a proxy for demand and levels are down 8.4% from the same period last year.

For just gasoline, the amount sent to the market was 0.8% below year-ago levels.

Rampant inflation -- which is running three times higher than the 2% target rate for the U.S. Federal Reserve -- an increase in retail gasoline prices and inclement late-winter weather may help explain some of the decline in demand.

Federal policymakers are widely expected to increase lending rates later this month, which makes vehicle and other high-retail items more expensive.

The price at the pump, meanwhile, is on the rise as refineries are making a summer blend of gasoline, which is more expensive to make.

On the economy in general, EIA said in its monthly report for March that it expected gross domestic product to drop from 2.1% last year to 0.9% for 2023.

EIA expects demand will remain resilient, though much of that support comes from outside the U.S. economy.

"China is the main driver of growth in 2023 as the country shifts away from its zero-COVID policy, a shift that will increase travel," EIA's market report for March read.

Retail gasoline prices, meanwhile, are expected to drop from the average of $3.97 during 2022 to $3.36 this year, a 3-cent-per-gallon revision lower from EIA's report for February.

Despite the week-on-week decline in demand, EIA raised its forecast for domestic gasoline consumption by 2% from February. Lower vehicle-miles traveled offsets a decline in overall fuel efficiency.