Weather, coronavirus hit Japan middle distillate sales

Japan's middle distillates sales are likely to fall this month because of warmer-than-normal winter weather and the impact of the coronavirus outbreak.

Demand for kerosine, a major heating fuel, is forecast to fall by around 9pc from a year earlier in February, said Petroleum Association of Japan (PAJ) chairman Takashi Tsukioka.

Japan's domestic kerosine sales were 14.1mn bl (500,000 b/d) in February 2019, PAJ data show. Tsukioka's projection suggests the country's kerosine demand this month will fall to around 12.8mn bl, a drop of about 60,000 b/d.

Temperatures in Tokyo have averaged 7.8°C so far in February, compared with 7.2°C in February 2019, according to the Japan's meteorological agency.

Japan's diesel demand is also likely to weaken this month amid limited snow removal works. Lower utilisation of tourist buses and trucks carrying container cargoes for shipment to China are other factors dampening demand for diesel, said Tsukioka, who is also chairman of Japanese refiner Idemitsu.

And sales of jet fuel will be hit by the cancellation of some flights to China. Demand for bonded jet fuel at Japan's Narita airport is likely to decline by around 3.5pc on the year in February. Consumption is then likely to fall further in March, given the possible cancellation of longer-distance flights as international conferences and conventions across the world are called off or postponed, Tsukioka said.

Japan sold around 860,000 b/d of diesel, including for vehicle and other uses, in the domestic market in February last year. Jet fuel sales were around 86,000 b/d in the same month.

By Motoko Hasegawa