 In Japan, the latest April monthly data is dominated once more by huge increases in mcrude and residual fuel oil-use, as a result of all the country’s nuclear plants being shut down; however, it might bring a few of them back into service just during the summer peak. This move would reduce direct fuel-use at that time; but there are several rules which must be met in order to re operate any of the nuclear facilities.
During the complete shutdown of all these facilities, direct crude and residual fuel burning for electricity production is expected to increase further throughout 2012. The alternative fuels for power plants are crude — but only those with a low sulphur content — fuel oil and liquefied natural gas (LNG). Moreover, driven by increases in the mileage and number of vehicles as a result of government incentives, as well as a very low baseline, transportation fuel consumption increased as well.
In South Korea, oil demand in March declined by a drastic 3.7% y-o-y; the strongest declines were observed in residual fuel oil, jet fuel and LPG. Fuel oil and jet fuel fell by 49 tb/d and 40 tb/d y-o-y. In the first quarter, oil demand was flat, averaging 2.4 mb/d. OECD Pacific oil consumption grew by 0.04 mb/d during 2011. It is expected to grow again in 2012, by 0.22 mb/d, and the bulk of the increase will result from direct crude/fuel oil burning for electricity-generation and substituting for nuclear plants.
Driven by strong tax incentives and subsidies, as well as coming from a low baseline, Japanese auto sales continued to rise strongly in May — by a remarkable 66.4%. This trend has been seen since the third quarter of last year. Auto demand is expected to climb strongly throughout the year, partly due to higher sales in tsunami-hit areas, where thousands of cars were destroyed. Another factor is the government’s efforts to stimulate demand. The incentives especially favour hybrids, pure electric cars and other vehicles that employ advanced technology, such as clean diesel engines. South Korean domestic car sales gained 8.9% y-o-y in May, as a result of the launch of some new models during that month. Given the high number of car exports, the South Korean auto industry is largely dependent upon the world economy. Preliminary figures show South Korean oil demand in April down by 1% (–20 tb/d) y-o-y.
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