Most Japanese refiners will increase the amount of crude they will
process in July versus June as many plants are coming back online after spring
maintenance, oil refining industry officials said.
However, crude processing volume will remain slightly lower on-year, as oil
demand in
Japan
falls
amid a wide adoption of energy-efficient technology.
"We want to tighten the gasoline market by keeping runs a little lower
than last year," said Akitsugu Takahashi, senior vice president of JX
Nippon Oil & Energy Corp., Japan's largest oil refiner by capacity. "Gasoline
margins (in the domestic market) have been very slim because of
oversupply."
Stockpiles of gasoline have been steady on-year despite the slipping demand,
while middle distillates' inventories have fallen by about 10% from a year
earlier, data from the Petroleum Association of Japan showed.
Strong demand from reconstruction work in the areas hit by the tsunami and
earthquake in March 2011 led to the fall middle distillates' inventories. Also,
strong middle distillate margins at
Singapore
have
encouraged exports, helping cut the inventory, Mr. Takahashi said.
JX, the oil refining unit of JX Holdings Inc. (5020.TO), plans to process 5.95
million kiloliters of crude oil in July for the domestic market, or 1.21
million barrels a day, down 1% from a year earlier.
Two other refiners have similar plans.
Idemitsu Kosan Co. (5019.TO) will process 431,000 barrels a day of crude oil in
the July-September quarter for the domestic market, down 2% from a year
earlier.
Showa Shell Sekiyu KK (5002.TO) will process 462,860 barrels a day in the
July-September quarter for the domestic market, 2% lower on year. "We
don't have much excess capacity. So, we won't raise runs sharply," a
spokesman said.
Cosmo Oil Co.'s (5007.TO) crude processing volume in July is expected to drop
on-year, because the company will permanently close the 140,000 barrel-a-day
Sakaide refinery in western Japan later this month in response to the country's
falling oil demand. A Cosmo spokeswoman declined to talk about refinery operations.