By MARI IWATA
TOKYO -- 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
However, crude processing volume will remain slightly lower
on-year, as oil demand in Japan falls amid a wide adoption of
"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
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, plans
to process 5.95 million kiloliters of crude oil in July for the
domestic market, or 1.21 million bpd, down 1% from a year
Two other refiners have similar plans.
Idemitsu Kosan Co. will process 431,000 bpd of crude
oil in the July-September quarter for the domestic market, down
2% from a year earlier.
Showa Shell Sekiyu KK will process 462,860 bpd
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 crude processing volume in July is expected
to drop on-year, because the company will permanently close the
140,000 bpd 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.
Dow Jones Newswires