In October, total commercial oil stocks in Japan increased for the second consecutive month, by 1.6 mb, to stand at 183.0 mb, the highest level since the end of December 2008. With this build, inventories widened the surplus with last year to 2.7% from 1.4% a month earlier, while remained around 1.9 mb or 1.1% above the five-year average. The total stock-build came solely from products, which increased by 3.1 mb, while crude declined by 1.5 mb.
Japanese commercial crude oil stocks declined by 1.5 mb, reversing the build of last month, and ended October at 102.6 mb. At this level, they were 1.6 mb above the same time a year ago and 3.6 mb above the seasonal average. The stock-draw came as crude imports decreased by more than 300,000 b/d or 8.5% from a month earlier. At 3.3 mb/d, Japanese crude imports were also 3.6% lower than a year ago at the same time. Lower crude throughputs limited a further draw in October. Indeed, crude throughputs fell by around 150,000 b/d or 4.5% to stand at 3.1 mb/d, and were 1.1% below the same period a year ago. Japanese refineries were running at 69.4%, which was 3.3 pp lower than in the previous month and 0.1 pp below the same period last year. Direct crude burning in power plants fell by 2.8% to end October at around 241,750 b/d, but they still showed an increase of 9.7% when compared with the same period last year.
Japan’s total product inventories continued their upward trend, rising for the seventh consecutive month, by 3.1 mb, to end October at 80.3 mb, the highest level since December 2008. With this build, they switched the deficit of 2.2% of last month to a surplus of 4.0%. However, the deficit with the seasonal average remained at 2.0%. The build in total products came as total oil product sales in October fell for the first time in 11 months, as warmer temperatures curbed the demand for heating fuel. Within products, the bulk of the build came from distillates and naphtha, as other products remained almost unchanged. Distillate stocks continued their upward trend, increasing by 1.6 mb to end October at 37.5 mb, the highest level since November 2011. Despite this build, they still showed a deficit of 1.0 mb or 1.4%, compared with the five-year average, but they were 0.4 mb or 1.0% higher than the same period a year ago. Within the distillate components, all products saw a build. Kerosene stocks rose by 5.1%, reflecting lower domestic sales due to the unusually hot weather in October. Jet fuel inventories also rose by 2.2%, driven by a fall of 5.0% in domestic consumption, combined with a 23.4% decline in exports. Gasoil stocks increased by 4.5%, supported by a huge decline in exports and higher output.
Naphtha inventories saw an increase of 1.7 mb, ending October at 11.6 mb. At this level, they were 0.3 mb or 2.5% higher than a year ago, but still 0.9 mb or 7.3% lower than the five-year average. The build in naphtha stocks came from higher production, as this increased by 5.9%. Residual fuel oil stocks fell slightly, ending October at 17.1 mb and showing a surplus of 1.0 mb or 6% with a year ago; but they were 0.5 mb or 2.8% below the five-year average. Within the components of fuel oil, fuel oil A fell by 1.7%, while fuel oil B.C stocks remained almost unchanged. Lower production, combined with higher domestic sales, was behind the decline in fuel oil A inventories.
Gasoline stocks remained unchanged from the previous month and ended October at 14.1 mb. At this level, they were 1.5 mb or 11.9% higher than a year ago, representing a surplus of 1.1 mb or 8.7% with the seasonal average.