In September, total commercial oil stocks in Japan rose by 3.7 mb, reversing the
drop of last three months, to stand at at 164.4 mb. As this level, Japanese oil
inventories are 17.0 mb or 9.4% below a year ago and 13.0 mb or 7.3% lower than the
five-year average. Within components, crude saw a stock-build of 4.7 mb, while
products declined by 1.1 mb.
Japanese commercial crude oil stocks saw a build in September, reversing the fall of
the last three months, to stand at 89.5 mb. At this level, they are 14.6 mb or 14.0%
below a year ago at the same time and 7.8 mb or 8.0% below the five-year average.
The build in crude oil stocks was driven by lower crude throughput, which declined by
around 182,000 b/d or 5.1%, averaging 3.4 mb/d. However, at this level, crude runs
are 4.4% higher than the same month a year ago. Japanese refiners were running at
78.3%, around 4.3 pp lower than in the previous month, but 5.6 pp more than in the
same period last year.
Higher crude imports in September also contributed to the build in crude oil commercial
stocks. Indeed, crude oil imports rose by 248,000 b/d or 7.2% to average 3.7 mb/d. At
this level, they were also 2.9% higher than the same period last year. Direct crude
burning in power plants saw a significant drop of 42.3% in September when compared
to August and 46.6% lower than during the same period last year.
On the product side, Japan’s total product inventories saw a drop of 1.1 mb in
September, reversing the build of the last two months to stand at 74.8 mb. This drop
transformed the surplus of last month to a deficit of 2.4 mb or 3.1%, remaining below
the five-year average with a deficit of 5.3 mb or 6.6%. Lower refinery output, which
declined by 5.1% in September from August, was behind the drop in product
inventories. At 3.2 mb/d, Japanese refinery output was still 3.6% above the same
period last year. A decline in product imports of 14.2% also contributed to the stockdraw
in Japanese product stocks. However, the decrease in total domestic sales of oil
products by 4.1% from a month earlier to an average of 3.1 mb/d limited a further drop
in product stocks. With the exception of naphtha, all products witnessed a draw, with
the bulk coming from gasoline.
Gasoline stocks fell by 1.1 mb in September, ending the month at 12.3 mb, which is
1.1 mb or 1.8% less than the same time last year and 0.9 mb or 6.9% below the fiveyear
average. A decline of 13.3% in gasoline output combined with a decrease of
around 13% in imports were behind this stock-draw, while lower domestic sales limited
a further drop in gasoline stocks.
Distillate stocks fell slightly by 0.1 mb in September, reversing the build of the last
three months to finish at 35.9 mb, which is in line with a year ago at the same period
but still 1.8 mb or 4.9 % below the seasonal average. Within distillate components, jet
fuel and kerosene stocks rose, while gasoil stocks dropped. In September, kerosene
inventories rose by 7.8%, while jet fuel oil increased by 6.1% driven by high output. In
contrast, gas oil stocks fell by 15.4% on the back of higher domestic sales, which
increased by around 4%.
Total residual fuel oil stocks also went down by 0.3 mb to end the month of
September at 15.5 mb, which is 1.7 mb or 10.1% less than a year ago and 2.2 mb or
12.6% lower than the five-year average. Within the fuel oil components, fuel oil A and
fuel oil B.C stocks fell by 4.3% and 0.4%, respectively, driven by lower fuel oil output.
In contrast, naphtha stocks rose by 0.4 mb in September for the second consecutive
month, finishing at 11.1 mb, which is a surplus of 1.1 mb or 11% compared with a year
ago but a deficit of 0.3 mb or 2.3% below the seasonal norm. The build in naphtha
stocks came mainly from lower domestic sales, which declined by 5.2%, while lower
production limited any further build in naphtha stocks.