The weekly crude oil processing data have recorded year-on-year decrease for 8 consecutive weeks since mid-June. It seems represent recent slump of petroleum demand in Japan.
The below chart shows monthly petroleum demand in Japan over the past several years.
Crude oil throughput is in the downward tendency, while domestic sales of gasoline has been relatively stable. The lack of nuclear power supply has lifted sales of fuel oil since mid-2011.
Therefore, main reason for sluggish of Japan's crude oil demand is thought as the slump in other industrial demand.
Power saving due to shut of nuclear plants has seriously affected on Japanese companies' activity. Slowdown of industrial activities also reduce petroleum consumption.
Electricity supply by the Japan's largest utility firm Tokyo Electric Power Company in July is estimated at 25.6 billion kilowatts hour, down 0.2% from a year ago.
Lower electricity generation firstly reduces fuel consumption for thermal power plants. Petroleum purchased by TEPCO decreased 9.2% on year to 4.28 million barrels in July.
Meanwhile, daily maximum electricity demand in the area of Kansai Electric Power Company has been sufficiently lower than expected. The company restarted two of its nuclear reactors in July because it had forecasted significant electricity supply shortage during summer period. But until 10th August, the demand has not exceeded the supply capacity that does not include nuclear plants even once.
It suggests that KEPCO's petroleum use for thermal power remains in the lower than expected level.
This is also representing the effect of power saving. However, if the electricity demand in KEPCO's service area continues to be sufficiently below the supply capacity level until the end of summer season, anti-nuclear movements in Japan could escalate. Then the regional industrial sector is likely to be forced saving electricity for long period.
Sluggish industrial activities may hurt fuel demand further in the near future.
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