In Japan, total commercial oil stocks rose by 4.6 mb in September to stand at 173.0 mb, the highest level since October 2012. At this level, Japanese commercial oil inventories are 8.6 mb, or 5.2%, higher than a year ago and 2.5 mb, or 1.5%, above the five-year average. Within components, product stocks rose by 4.5 mb, while crude stocks rose slightly by 0.1 mb.
Japanese commercial crude oil stocks rose little in September to stand at 98.2 mb. With a build they were 8.7 mb, or 9.7%, above levels at the same time a year ago and 4.5 mb, or 4.8%, above the seasonal norm. The stock build in crude oil was driven by lower crude runs, which fell by around 20 tb/d, or 0.6%, to average 3.9 mb/d and remained 3.4% lower than the same time a year ago. Lower crude oil imports limited a further build in crude oil stocks. Indeed, crude oil imports fell by around 12,000 b/d, or 8.2%, to average 3.3 mb/d and were down 9.5% over the same period a year ago. Direct crude burning in power plants fell by nearly 56% in September compared with the previous month, averaging 42 tb/d and showing a decline of 68% over the same period a year ago.
Japan’s total product inventories rose by 4.5 mb in September for the third consecutive month to stand at 74.8 mb. At this level, product stocks are in line with the same time a year earlier but still showed a deficit of 2.0 mb, or 2.6%, with the five-year average. The build was driven by lower domestic sales, which declined by 40,000 b/d to average 2.9 mb/d in September, and which are 6.9% below the same period a year ago. The ongoing fall in domestic sale puts Japanese inland consumption at the lowest monthly level since 1985. With the exception of gasoline, all products witnessed a stock build.
Distillate stocks rose by 2.1 mb in September for the third consecutive month to stand at 35.0 mb. At this level, distillate stocks were still 1.0 mb, or 2.7%, below the same period a year ago and 1.1 mb, or 3.1%, lower than the seasonal average. Within distillate components, kerosene experienced a build, while jet fuel and gasoil saw a stock-draw. Kerosene inventories rose by 24.7% on the back of higher imports as domestic sales increased. Gasoil fell by 9.3% driven by lower output combined with higher domestic sales. Jet fuel stocks also fell by 3.0% on the back higher domestic sales.
Total residual fuel oil stocks rose by 0.4 mb for the third consecutive month to end September at 17.4 mb, which is 1.9 mb, or 12.0%, above a year ago and 0.6 mb, or 3.7%, higher than the latest five-year average. Within fuel oil components, both fuel oil A and fuel oil B.C stocks rose by 0.5% and 3.2%, respectively. The build in residual oil was driven by higher output in case of fuel oil A, while lower consumption pushed stocks of fuel oil B.C higher. Naphtha stocks rose by 2.1 mb to finish the month of September at 12.0 mb, indicating a surplus of 1.2 mb, or 11.2%, compared to the seasonal norm and 0.9 mb, or 8.5%, higher than the same period a year ago. The stock build came mainly from reduced domestic sales.
In contrast, gasoline stocks fell by 0.2 mb in September for the second consecutive month to stand at 10.4 mb, which is 1.9 mb, or 15.5%, less than at the same time the previous year and 2.7 mb, or 20.5%, below the five-year average. Higher domestic sales combined with lower refinery runs were behind the drop in gasoline stocks.