Japan's oil demand recovers regardless of the thermal power

Petroleum demand is recovering in Japan. Although many people imagine that it is due to consumption for thermal power triggered by heat wave, recent growth of petroleum demand in the nation is actually not related to electricity. Petroleum consumption for thermal power is rather decreasing in Japan.

Tokyo Electric Power Company used about 117,000 barrels per day of petroleum in July for thermal power. It was 27% lower than a year ago despite the company's total electricity supply in the month increased 1.8% on year.

Monthly petroleum consumption by Japanese 10 major utility firms recorded year-on-year decrease consecutively in the first six months in this year, according to the data by the Federation of Electric Power Companies. Average oil use in Jan-Jun period fell 21.2% on year to 438,000 bpd, especially consumption in June slumped 32.3% from a year ago.

Japanese electric power companies have reduced use of petroleum and liquefied natural gas for thermal power, since they are increasing coal-burning thermal power capacity. Coal consumption by the ten firms in the first half of this year rose 11.5% to 26.66 million tonnes, while their LNG use in the same period fell 0.4% on year to 27.35 million tonnes.

On the other hand, total petroleum supply (domestic sales and net exports) by Japanese refineries increased on year during Apr-Jun, according to the Ministry of Economy, Trade and Industry.

In the breakdown, supply of gasoline and gas oil shown steady increase, but fuel oil supply was weaker despite close to the summer electricity demand season.

Moreover, crude oil processing by Japanese refineries rose 3.0% on year to 3.42 million bpd in July, according to the Petroleum Association of Japan. Thus, steady petroleum demand seems to be continuing. It may reflect the economic recovery in the nation.

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