In July, total commercial oil stocks in Japan declined by 2.0 mb for the second consecutive month to stand at 165.2 mb. As this level, oil inventories are 13.0 mb or 7.3% below a year ago and 13.6 mb or 7.6% lower than the five-year average. Within components, crude saw a stock-draw of 3.1 mb, while products increased by 1.1 mb.
Japanese commercial crude oil stocks saw a drop of 3.1 mb in July, following a fall of 1.9 mb in June to stand at 96.4 mb. At this level, they are 8.0 mb or 7.7% below a year ago at the same time and 8.7 mb or 8.3% below the five-year average. The drop in crude oil stocks was driven by higher crude throughput, which rose by around 260,000 b/d or 8.1%, averaging 3.4 mb/d. At this level, they are also 2.7% higher than the same month a year ago. Japanese refiners were running at 76.3%, around 5.7 pp higher than in the previous month and 2.0 pp more than in the same period last year.
Higher crude imports in July limited further declines in crude oil stocks. Indeed, crude oil imports rose by 207,000 b/d or 6.3% to average 3.5 mb/d. At this level, they were also 1.6% higher than the same period last year. Direct crude burning in power plants fell slightly by 1.7% in July after declining by more than 20% in June. At 184,241 b/d, direct crude burning stood 9.5% higher than during the same period last year.
On the product side, Japanís total product inventories saw a build of 1.1 mb in July, reversing the draw of the last two months to stand at 68.9 mb. Despite this build, they showed a deficit of 5.0 mb or 6.7% compared with a year ago and are 4.9 mb or 6.7% lower than the five-year average. Higher refinery output, which increased by 10.5% in July from June was behind the build in product inventories. At 3.2 mb/d, Japanese refinery output was 4.1% above the same period last year. A rise in product imports of 2.6% also contributed to the build in Japanese product stocks. However, the increase of total domestic sales of oil products in Japan, which rose by 11.7% from a month earlier to an average of 3.2 mb/d, limited a further build in product stocks. Within products, the picture was mixed; distillates and residual fuel oil witnessed builds, while gasoline and naphtha dropped.
Distillate stocks rose by 2.4 mb in July for the second consecutive month, ending the month at 31.1 mb. At this level, they are 0.2 mb or 0.6% below a year ago and 1.4 mb or 4.2% above the seasonal average. Within distillate components, jet fuel and kerosene stocks rose, while gasoil stocks dropped. In July, kerosene inventories increased by 18.3%, driven by higher output, while improved domestic sales limited a further build in kerosene stocks. Jet fuel stocks rose by 4.1% on the back of higher production, which increased by 7.7%. In contrast, gasoil stocks fell by 1.1%, reflecting higher domestic sales, which increased by 10.9%.
Total residual fuel oil stocks went up by 0.3 mb to end the month of July at 14.8 mb. At this level, they were 2.6 mb or 14.8% less than a year ago and 1.9 mb or 11.7% lower than the five-year average. Within the fuel oil components, the picture was mixed as fuel oil A inventories fell by 3.9%, while fuel oil B.C stocks rose by 6.2%. Naphtha stocks fell by 1.2 mb to finish the month of July at 10.2 mb. At this level, they represent a deficit of 0.9 mb or 8% compared with a year ago and 1.4 mb or 12.0% less than the seasonal norm. The drop in naphtha stocks came from higher domestic sales, which rose by 13.0%.
Gasoline stocks also fell by 0.5 mb in July, ending the month at 12.8 mb. At this level, they are 1.3 mb or 9.5% less than the same time last year and 0.2 mb or 1.6% below the five-year average. A rise of 13.4% in domestic sales was behind this stock-draw, while higher gasoline output limited a further drop in gasoline stocks.