Japan kerosene stockpile drops

Tokyo: Heating fuel inventories in Japan last week showed the biggest drop in one-and-a-half months helped by seasonal demand, but refiners continued to cut down on kerosene output to deal with high stockpiles amid milder winter, industry data showed yesterday.

Heating fuel inventories dropped 8.3 per cent on the week helped by demand mainly in northern and eastern Japan, while petrol stocks dropped 1.4 per cent from the previous week, the Petroleum Association of Japan (PAJ) said.

Japanese refiners have been reporting slow fuel demand as temperatures in Japan have been warmer than normal since early February, with forecasts for mild weather to continue through April.

Comparison

Despite the weekly drop, kerosene stockpiles stood 35.5 per cent higher from a year earlier due to sluggish demand, although the peak kerosene season officially ends in mid-February in the Kanto region in and around Tokyo, said Kaname Gokon, manager of the research section at Okato Shoji Co.

"It is soon going to be the petrol season," Gokon said. "To cut down on high stockpiles of kerosene and make space to store petrol, refiners will continue to turn kerosene into jet fuel for export until March or April."

Stocks of kerosene for heating fell by 333,000 kilolitres (2.1 million barrels) to 3.66 million kilolitres (23.05 million barrels) in the week ended February 10 from the previous week, the PAJ data showed.

The fall of 333,000 kilolitres was the biggest since a decline of 391,000 kilolitres (2.46 million barrels) in the week ended December 30.

Petrol stocks fell by 34,000 kilolitres (214,000 barrels) to 2.31 million kilolitres (14.5 million barrels) last week, but petrol stocks stand 10 per cent higher from the same time last year, analysts said.

Crude stocks fell by 0.3 per cent to 16.95 million kilolitres (106.6 million barrels). Refinery run rates rose 0.3 percentage point to an average 86.8 per cent of total capacity.