Recovery of Japan's energy demand stays slow

Although Japan's economic recovery is anticipated widely, the country's energy consumption still remains in the sluggish level.

Crude oil processing by Japanese refineries has decreased on year in the past three consecutive weeks, according to the Petroleum Association of Japan. The latest number was 7.4% drop on year to 3.41 million barrels per day, that was the lowest processing volume since early December last year.

Japanese refineries are usually shut their facilities for maintenance in this season since petroleum demand decreases seasonally.
Showa Shell plans to cut its crude oil processing in the 2Q this year by 5.9% from a year earlier due to the maintenance shutdown at its Yokkaichi and Sodegaura refineries. Idemitsu Kosan is also scheduling to reduce its Apr-Jun crude processing by 4% on year because of maintenance at its Chiba refinery.

Although each individual companies' crude oil processing is affected by their maintenance schedule, decreasing numbers in entire Japan seem to show slowdown of petroleum demand.

Japan's weekly crude oil processing was averaged at about 3.7 million bpd during mid December 2012 and March 2013, according to the PAJ data. It was about 1.5% higher than a year earlier.

Since stocks of petroleum products has increased straightly during the period, it was clear that slightly higher on year supply of products had exceeded demand.
Moreover, products inventories have not decreased significantly despite the lower crude oil processing over the past couple of weeks.

It was of course affected by the warm weather conditions, but weak demand also seemed to lead the ample inventories.
Japan's domestic sales of fuel oil in February fell by 7.0% on year to 3.91 million bpd, according to the Ministry of Economy, Trade and Industry.

Electricity demand is also sluggish. Estimated power supply by Tokyo Electric Power Company slipped 10% on year to 23.3 billion kilowatt-hour in March.
Extremely warm temperature was likely to influence the low electricity demand definately, but it was the first two digits drop after summer 2011, when extraordinary shortage of power supply capacity after the severe earthquake forced consumers to save electricity significantly.

Weather has too much influence on electricity demand, it suggests that demand for heating has been more important due to the sluggish industrial demand.

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