In Japan, total commercial oil stocks rose by 5.8 mb to stand at 168.4 mb, the highest level since June 2013. At this level, Japanese oil inventories are 7.7 mb or 4.8% higher than a year ago, but remained 4.1 mb or 2.4% lower than the five-year average. Within components, product stocks rose by 7.5 mb, while crude stocks fell by 1.7 mb/d.
Japanese commercial crude oil stocks declined in August to stand at 98.1 mb. Despite this drop, they were 13.3 mb or 15.7% above year-ago levels at the same time, and 2.3 mb or 2.4% below the seasonal norm. The stock draw in crude oil was driven by higher crude runs, which rose by around 188 tb/d, or 6.0%, to average 3.3 mb/d, though still nearly 7.7% lower than the previous year at the same time. High crude oil imports limited a further drop in crude oil stocks. Indeed, crude oil imports rose by around 254,000 b/d or 8.2% to average 3.4 mb/d but were down 2.6% over the same period a year ago. Direct crude burning in power plants fell by nearly 27% in August compared with the previous month, averaging 97 tb/d and showing a decline of 58% over the same period a year ago.
In contrast, Japan’s total product inventories rose by 7.5 mb in August for the second consecutive month. At 70.3 mb, product stocks still showed a deficit of 5.6 mb or 7.4% compared with the same time a year ago and remained below the five-year average with a deficit of 6.4 mb or 8.4%. The build was driven by high refinery output, which increased by almost 185,000 b/d to average 3.0 mb/d in August, but still remained 9.3% below one year earlier during the same period. Higher product sales, which increased by 2.1% in August, limited a further build in product stocks. However, Japan’s total oil product sales in August fell 9.7% from a year earlier, reaching their lowest monthly rate since 1986. With the exception of gasoline, all products witnessed a stock build.
Distillate stocks rose by 6.5 mb in August for the second month to stand at 32.8 mb. At this level, distillate stocks were still 3.2 mb or 8.9% below the same period a year ago and 2.9 mb or 8.2% lower than the seasonal average. All distillate components experienced a build in August. Jet fuel inventories rose by 10.4% on the back of lower domestic sales, which decreased by almost 10.4% in August, compared with the previous month. Kerosene stocks rose by 38.6%, driven by higher output, which almost doubled from the previous month. Gasoil inventories went up by 19.6% on the back of a 5% decline in domestic sales.
Total residual fuel oil stocks also rose by 0.9 mb to end the month of August at 17.0 mb, which is 1.2 mb or 7.5% above a year ago and 0.5 mb or 3.3% higher than the latest five-year average. Within fuel oil components, fuel oil A stocks and fuel oil B.C stocks rose by 8.7% and 3.9%, respectively. The build in residual oil was driven by higher output combined with lower consumption. Naphtha stocks rose by 0.5 mb, to finish the month of August at 9.9 mb, still indicating a deficit of 0.8 mb, or 7.6%, compared with a year ago and 1.5 mb, or 12.8%, below the seasonal norm. The stock build came mainly from higher output, which increased by nearly 20%. Higher domestic sales have limited a further build in naphtha stocks.
In contrast, gasoline stocks fell by 0.4 mb in August, reversing the build of the previous month to stand at 10.6 mb, which is 2.8 mb or 20.9% less than at the same time the previous year and 2.6 mb or 19.5% below the five-year average. Higher domestic sales, which rose by 10.2%, were behind the drop in gasoline stocks. However higher refinery output limited a further drop in gasoline inventories.