Japan Stock Movements – August 2015

In Japan, total commercial oil stocks fell by 1.0 mb, after increasing sharply in May by 15.6 mb. At 158.9 mb, Japanese commercial oil inventories stood 4.0 mb or 2.5% lower than a year ago, but remained 13.2 mb or 7.7% below the five-year average. Within the components, crude inventories rose by 4.0 mb, while product stocks fell by 5.0 mb.

Japanese commercial crude oil stocks rose in June for the second consecutive month to stand at 97.8 mb. Despite the build, stocks were 6.8 mb or 6.0% below a year ago at the same time and 6.0 mb or 5.8% lower than the seasonal norm. The stock-build in crude oil was driven by lower crude throughput, which fell by around 335,000 b/d or 11.1% to average 2.7 mb/d in June. Refineries were running at 68.1%, 8.6 pp below the previous month, but remained 1.6% above a year ago at the same time. The drop of 370,000 b/d in crude oil imports limited a further build in crude oil stocks. At 2.9 mb/d, crude oil imports were 2.5% below a year ago at the same time.

In contrast, Japan’s total product inventories fell by 5.0 mb in June, reversing the build of the previous two months. At 65.8 mb, product stocks stood 2.7 mb or 4.7% above the same time a year ago, but showed a deficit of 7.2 mb or 10.6% with the fiveyear average. The drop was driven mainly by lower refinery output, which declined by around 190,000 b/d or 6.8% to stand at 2.6 mb/d, but was 2.8% higher than a year ago at the same time. Oil product sales remained almost unchanged in June, averaging 2.8 mb/d, but rose 0.8% from a year earlier at the same time. Within products, all showed stockdraws, with the bulk coming from residual fuel oil.

Gasoline stocks decline by 0.9 mb in June to stand at 11.0 mb, indicating a slight surplus of 0.2 mb or 1.9% with the same time a year ago, but 1.9 mb or 14.7% below the five-year average. The fall in gasoline stocks came on the back of lower gasoline production, combined with lower imports. Higher gasoline domestic sales limited a further build in gasoline stocks.

Distillate stocks fell by 1.8 mb in June to stand at 25.4 mb. At this level, distillate stocks were 1.8 mb or 7.6% above the same period a year ago, but 3.0 mb or 10.5% below the seasonal average. Within distillate components, gasoil and jet fuel stocks fell by 17.8% and 9.1%, respectively, while kerosene stocks rose by 4.6%. The drop in gasoil and jet fuel stocks was mainly driven by lower output, combined with higher domestic sales. However, the build in kerosene stocks was driven by lower domestic sales and strong imports.

Total residual fuel oil stocks fell by 2.3 mb in June to stand at 12.4 mb, which was 2.3 mb or 15.5% below a year ago and 3.4 mb or 21.4% lower than the latest five-year average. Within the fuel oil components, fuel oil A and fuel oil B.C stocks fell by 6.2% and 12.8%, respectively. The drop was mainly driven by lower output.