Japan's August crude imports rebound amid oil product demand recovery - S&P Global

Japan's August crude imports rebound amid oil product demand recovery - S&P Global


Japan's August crude imports rebound amid oil product demand recovery - S&P Global

Posted: 30 Sep 2020 01:52 AM PDT

Highlights

August crude imports lowest for month since 1988

Refiners, traders remain cautious about further recovery amid pandemic

Net gasoline importer for fifth month amid continuous recovery

Tokyo — Japan's demand for crude oil and refined products improved significantly during the peak summer demand month of August, with crude imports recovering to 2.36 million b/d, up 13% from the lowest level in more than half a century reached in July.

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The August crude imports, however, were down 23.9% from a year earlier and marked the lowest level in 32 years for the month, according to preliminary data released Sept. 30 by the Ministry of Economy, Trade and Industry.

Japanese refiners and traders expect recovery in the domestic oil demand to be slow in the coming months without a significant improvement in situations surrounding the coronavirus pandemic, according to industry sources.

"Depending on the spread of the coronavirus pandemic as well as how the situation is resolved going forward, we expect the current level of demand to continue if the current situation persists," Petroleum Association of Japan President Tsutomu Sugimori said Sept. 17. "Looking at the second half of the current fiscal year, we do not expect demand to recover until the end of the fiscal year [March 31, 2021]."

Japan's August crude imports increased from July as its imports from Saudi Arabia, which was the largest crude supplier for the month, jumped 15.2% month on month to 1.07 million b/d. The Saudi crude imports, which accounted for 45.3% of the total imports, also rose 16% from a year earlier.

COMPETITIVE SUPPLY

Asian refiners were trying to maximize Saudi Aramco's term volumes for July loading, or August arrival, as official selling prices from Saudi Aramco were more competitive than the UAE's Abu Dhabi National Oil Co.'s, according to market sources.

Saudi Aramco had set the July OSP differential for its Arab Light crude headed to Asia at plus 20 cents/b against the average of the Dubai and Oman benchmarks over July.

In contrast, ADNOC had set its July OSP for its flagship light crude Murban at a premium of $1/b to Platts Dubai crude assessments.

Asian refiners were also trying to maximize term volumes amid volatility in spot crude oil prices during the period.

On the supply front, OPEC+ also eased production cuts to 7.7 million b/d from August from 9.7 million b/d earlier.

Japan's crude imports from other key Middle Eastern crude suppliers such as the UAE, Kuwait and Qatar fell year on year in August, but Kuwaiti crude imports surged 42.6% month on month to 202,153 b/d in the month.

The reduction in Middle Eastern crude imports, coupled with increased intakes from Ecuador as well as imports from Russia, the US and Algeria, reduced Japan's share of crude imports from the Middle East to 88.1% from 95.2% in July, the highest the market share has been since records began in 1950.

IMPROVED DEMAND

In August Japan's domestic gasoline and jet fuel sales increased month on month during the country's peak summer holiday demand season despite a resurgence of the coronavirus pandemic.

The August gasoline sales rose 8.8% month on month to 890,580 b/d, with jet fuel sales jumping 20.5% from a month earlier to 74,263 b/d. Gasoline sales in August remained the lowest for the month since 1989 and August jet fuel sales were also the lowest since 2012.

A continuous recovery in the domestic oil products demand amid a steep drop in the crude throughput led Japan to boost imports of refined products in August.

Japan imported an average of 697,301 b/d of oil products in August, while local refiners slashed their crude throughput by 26.6% year on year to 2.348 million b/d in the month.

Japan was a net importer of gasoline for the fifth consecutive month in August due to low refinery run rates and a month-on-month recovery in domestic sales.

The country imported an average of 85,755 b/d of gasoline in August, up 27.3% from a year earlier while it exported 18,888 b/d of the motor fuel during the month.

Countries

Aug 2020 (b/d)

Share (%)

Aug 2019 (b/d)

% chg on year

July 2020 (b/d)

% chg on month

Saudi Arabia

1,070,441

45.3

922,824

16.0

928,930

15.2

United Arab Emirates

585,313

24.8

1,102,060

-46.9

710,912

-17.7

Kuwait

202,153

8.6

259,494

-22.1

141,781

42.6

Russia

164,828

7.0

211,198

-22.0

23,827

591.8

Qatar

164,600

7.0

319,429

-48.5

159,962

2.9

Ecuador

68,494

2.9

54,278

26.2

22,320

206.9

Iraq

30,986

1.3

33,557

-7.7

0

N/A

Bahrain

26,634

1.1

48,740

-45.4

47,329

-43.7

Algeria

14,105

0.6

0

N/A

16,754

-15.8

United States of America

10,978

0.5

37,379

-70.6

0

N/A

Other

22,578

1.0

113,164

-80.0

38,457

-41.3

Total

2,361,112

100.0

3,102,123

-23.9

2,090,272

13.0

Countries

Jan-Aug 2020

Jan-Aug 2019

% chg on year

Saudi Arabia

978,248

1,088,663

-10.1

United Arab Emirates

837,338

883,666

-5.2

Kuwait

247,878

249,528

-0.7

Qatar

217,145

271,415

-20.0

Russia

79,836

150,224

-46.9

Bahrain

41,994

49,095

-14.5

Ecuador

37,974

45,679

-16.9

Kazakhstan

25,750

19,627

31.2

United States of America

18,581

76,577

-75.7

Iraq

12,493

40,256

-69.0

Other

45,697

199,176

-77.1

Total

2,542,932

3,073,908

-17.3

Source: Ministry of Economy, Trade and Industry

Crude oil futures rise on firm spot demand - Deccan Herald

Posted: 18 Sep 2020 12:00 AM PDT

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Representative image. Credit: Reuters

Crude oil prices on Friday rose by Rs 7 to Rs 3,031 per barrel as participants widened their positions on firm spot demand.

On the Multi Commodity Exchange, crude oil for delivery in September traded higher by Rs 7, or 0.23 per cent, at Rs 3,031 per barrel in 2,998 lots.

Analysts said raising of bets by participants kept crude oil prices higher in the futures trade.

Globally, West Texas Intermediate crude oil rose by 0.88 per cent to USD 41.33 per barrel, while Brent crude was trading up 0.79 per cent at USD 43.64 per barrel in New York.

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Oil prices fall as COVID-19 cases spike - Yahoo Sports

Posted: 29 Sep 2020 01:50 AM PDT

View photos
An oil pump outside Saint-Fiacre, near Paris, France. Photo: Christian Hartmann/Reuters

Oil prices have been falling on Tuesday as COVID-19 cases continue to rise, undermining long-term demand.

The crude oil spot price was around $40 (£30.60) a barrel (CL=F), down 0.7% at 9am on Tuesday in London. Brent crude was around $42 a barrel (BZ=F), lower by 0.5%.

Over 1 million people have died of COVID-19 worldwide as of Tuesday, according to Reuters. Healthcare officials say fatalities and infections are continuing to rise as governments struggle to contain the spread.

Watch: Global coronavirus deaths pass one million

In August, Brent and West Texas Intermediate price reached their highest levels since early March after optimism following rising fuel demand and the largest oil producers' public promises for supply cuts. Since then, the outlook has taken a hit over mounting pandemic-related demand fears, leading to the price dropping by about $3 per barrel.

Pandemic concerns are also outweighing any short-term positive impact a US stimulus package could have on oil prices. Commodities temporarily gained earlier in the week as Democratic lawmakers unveiled a new $2.2tn (£1.7tn) coronavirus relief bill, which US House of Representatives speaker Nancy Pelosi said was a compromise measure.

View photos
The Brent crude oil price has slipped following COVID-19 concerns. Chart: Yahoo Finance

"If it happens, the US stimulus checks will go a long way to shoring up US oil demand at a most critical juncture and could move oil prices back into a pre-September frame of mind," said AxiCorp market strategist Stephen Innes, in a note.

Oil watchers are now focused on any signs of renewed demand in the US.

Data from the American Petroleum Institute out on Tuesday and the Energy Information Administration on Wednesday will be two key indicators.

READ MORE: European markets open weaker as key Brexit talks begin

A geopolitical dispute between Armenia and Azerbaijan over the Nagorno-Karabakh region is also in focus. Azerbaijan is a major energy producer and possesses critical pipelines for transporting oil and gas to global markets. Analysts are currently playing down fears that the tension could lead to a material disruption.

Watch: What is a V-shaped economic recovery?

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