Japanese crude demand drops at the end of June, product stocks shrink

Quantum Commodity Intelligence – Japan's crude oil throughput during the final week of June slumped to a five-week low while stocks of refined products shrank and product demand was mostly stable, according to Petroleum Association Japan statistics Wednesday.

Crude throughput fell for a second consecutive week in the week to June 26, at 14.23 million barrels, down 4.9% or 731,069 barrels from the week before.

With throughput down and available refining capacity also lower, utilisation rates dropped by 3.8 percentage points to 81.5% – losing nearly all of last week's gains.

At the same time, crude oil stocks fell 3.4% on the week or 2.35 million barrels to 67.30 million barrels, meaning inventories have been drawn down by 3.35 million over the past month.

The fall in crude oil stocks outstripped the fall in crude throughput, implying Japanese crude imports were down over the week.

Total product stocks nudged 2.6% lower on the week to a six-week low of 66.35 million barrels, as gains in inventories of naphtha and kerosene failed to offset losses in gasoline, jet, gasoil and fuel oil stock levels.

The steepest weekly losses were recorded for jet which was down 11.7% to over a six-week low of 4.38 million barrels while gasoil stocks fell 7.3% on the week to just over 11 million barrels.

Implied demand figures, which do not include the impact of imports, showed all products except gasoline register double-digit percentage falls, while fuel oil type A demand was up marginally on the week.

Jet fuel consumption surged after disappointing figures during the prior week to 637,384 barrels, well above the four-week average of 387,336 barrels.

Demand for road fuels were mixed with diesel demand up over 21% on the week to 4.15 million barrels while gasoline demand was down nearly 6% to 4.64 million.

With product consumption and stocks levels lower, imports of products were also likely lower on the week.