Japan Stock Movements - May 2016

In Japan, total commercial oil stocks fell by 3.7 mb in March for the sixth consecutive month to stand at 143.6 mb. At this level, Japanese commercial oil inventories stood at 2.5 mb, or 1.7%, lower than a year ago at the same time, but were 14.5 mb or 9.2% below the five-year average. Within the components, crude stocks went up by 1.5 mb, while products experienced a stock draw by 5.2 mb.

In March, Japanese commercial crude oil stocks rose, ending the month at 88.5 mb, 0.4 mb above a year ago at the same time, but remained 7.0 mb or 7.3% below the seasonal norm. The build in crude stocks came on the back of higher crude oil imports, which increased by about 97,000 b/d or 2.8% to stand at 3.6 mb/d. The fall in crude runs also contributed to the build in crude oil stocks. Indeed, Japanese crude throughput averaged 3.4 mb/d, a decline of 30,000 b/d from the previous month. This corresponds to refinery run rate at 86.2%, 2.0 pp less than last month.

In contrast, Japan’s total product inventories fell by 5.2 mb in March, ending the month at 55.1 mb. At this level, product stocks stood 2.9 mb, or 5.0%, below the same time a year ago, and showed a deficit of 7.6 mb, or 12.1%, with the five-year average. The fall was mainly driven by lower product imports, which decreased by more than 90,000 b/d, to average 0.5 mb/d. However, the fall in oil product sales - a continued decline in the use of fuel oil for power generation - limited a further oil product stocks draw. Japanese oil product sales fell by 150,000 b/d or 4.5% versus the previous month to stand at 3.4 mb/d. Within products, the picture was mixed; gasoline, distillates and naphtha experienced draws, while residual fuel oil witnessed a slight build.

Distillate stocks fell by 3.4 mb in March to stand at 20.5 mb. At this level, distillate stocks were 3.1 mb, or 13.1%, below the same period a year ago and 4.2 mb, or 16.9%, less than the seasonal average. Within distillate components, Jet fuel, kerosene and gasoil inventory fell by 7.1%, 16.6% and 17.8% respectively. The fall in distillate components stocks was driven by lower output, combined with a decline in imports. Gasoline stocks fell slightly by 0.1 mb, ending March at 10.7 mb. At this level, they indicated a deficit of 0.1 mb, or 0.6%, with the same time a year ago, and they were 2.0 mb or 15.5% below the latest five-year average. This fall in gasoline stocks was mainly driven by higher gasoline demand, which increased by 10.8%. Higher gasoline output limited a further gasoline stock draw.

Naphtha inventories also fell by 1.7 mb in March to stand at 10.9 mb, which was 0.4 mb, or 4.2%, higher than a year ago at the same time, and 0.6 mb, or 6.0%, higher than the seasonal norm. This fall was driven mainly by lower output, which declined by nearly 10%.

In contrast, total residual fuel oil stocks rose slightly, by 0.1 mb in March, to stand at 13.0 mb, which was 0.2 mb, or 1.2%, below a year ago and 2.0 mb, or 13.5%, lower than the latest five-year average. Within the fuel oil components, fuel oil A rose by 2.2%, while fuel oil B.C fell by 2.5% The build in fuel oil A was driven by higher production, which increased by 3.5%, while the fall in fuel oil B.C stocks reflect higher domestic sales, which increased by 6.0%.