March 22 (UPI) -- U.S. crude oil inventories are bloated and some demand indicators for fossil fuel products suggest there are remaining headwinds in the broader economy, analysts said Wednesday.
The U.S. Energy Information Administration, the statistical arm of the Energy Department reported that domestic crude oil inventories increased by 1.1 million barrels from the seven-day period ending March 10.
Builds and declines in inventories serve as something of a bellwether for overall demand. At 481.2 million barrels, commercial crude oil inventories are about 8% above the five-year average for this time of year.
The total amount of refined petroleum products supplied to the market, a proxy for overall demand, for the week ending March 17 was 6.2% below year-ago levels. Gasoline inventories declined by a staggering 6.4 million barrels from the previous week, among the largest declines in years.
Analysts at the Oil Price Information Service said via Twitter that much of the decline in gasoline levels may be a reflection of "a purging of the system" of the leftover winter-blend of gasoline.
Refiners need to switch to a summer-blend of gasoline by March 1. That product is more expensive because of the additional steps needed to keep it from evaporating, though retail prices have so far not reacted much because of lower crude oil prices, which account for the bulk of what consumers see at the pump.
The price for Brent crude oil, the global benchmark for the price of oil, lost 11.8% of its value last week amid concerns that the collapse of Silicon Valley Bank in California and Signature Bank in New York was the start of a global financial crisis.
Lending support, and the acquisition of struggling Credit Suisse by Swiss investment bank UBS, helped soothe market nerves, however. Brent closed last week at $72.97 per barrel, but had clawed back to $75 per barrel by the middle of the trading day Wednesday.
There are signs nevertheless that U.S. economic growth is sputtering, with home sales on the decline. Inflation, meanwhile, is running at about three times as high as the 2% target rate for the U.S. Federal Reserve.
Looking at distillates, a refined product category that includes road diesel, Patrick DeHaan at GasBuddy said signs may be pointing to an economic slowdown.
"Weak distillate demand is sounding an economic alarm that something is amiss," he told UPI.