U.S. energy data suggests a cooling economy

April 5 (UPI) -- Implied demand for refined petroleum products such as gasoline show the U.S. economy may be cooling off, analysis of recent federal data found.

The U.S. Energy Information Administration, the Energy Department's data cruncher, showed total commercial crude oil inventories declined by 3.7 million barrels from week-ago levels.

An emailed report from S&P Global Commodity Insights said the decline in crude oil inventories suggested refineries were busy. S&P estimates refineries put 1 million barrels per day more through their systems than they did during the week ending March 3, which would explain some of the inventory decline.

Inclement weather in Texas late last year limited refinery activity before a regular period of late-winter maintenance that coincides with a shift to a summer blend of gasoline, which requires additional processing steps to keep it from evaporating during warmer months.

While S&P data pointed to a larger draw on commercial storage levels than the government, the agency said that any decline was likely the result of increased refinery activity. Federal data show refineries were working at 89.6% of their full capacity last week, compared with a run rate of 86% for the seven-day period ending March 3.

On the demand side, federal data show the total amount of refined petroleum products sent to the market over the four-week period ending March 31 averaged 20.1 million barrels per day, down 1.5% from year-ago levels.

Analysts use that data point as a proxy for demand. Tom Kloza, the head of the Oil Price Information Service, said that data shows a clear economic decline.

"If you believe gasoline demand is well above last year, you may be deluding yourself," he said from his official account on Twitter.

Demand could be on the decline because of an uptick in retail gasoline prices, which at $3.53 for a national average are 13 cents per gallon more than this time last month, according to AAA.

Recent data from the labor sector, meanwhile, showed the economy is cooling off.

"Our March payroll data is one of several signals that the economy is slowing," said Nela Richardson, the chief economist at ADP. "Employers are pulling back from a year of strong hiring and pay growth, after a three-month plateau, is inching down."