Japan Oil Buyers May Seek Cargo Delays as Fuel Use Drops 20%
(Bloomberg) -- Japan oil refiners may seek to delay imports as measures to halt the spread of the coronavirus could cut fuel demand up to 20% this quarter, according to the head of nation’s industry group.
Domestic refiners will likely cut spot purchases and may be forced to reduce processing rates as storage tanks near capacity, Takashi Tsukioka, the head of Petroleum Association of Japan, told reporters in Tokyo on Friday. One or more Japanese refinery may shut if fuel demand keeps declining, according to Tsukioka, who is also chairman of processor Idemitsu Kosan Co.
Prime Minister Shinzo Abe will expand an existing state of emergency in seven prefectures to cover the whole country, he told his virus task force Thursday. The period will last to May 6, and is designed to limit people’s movements during peak travel periods in late April and early May.
Refiners are expected to take contracted crude volumes for April and May but may seek to delay cargoes loading in and after June, according to Tsukioka. Second-quarter jet fuel demand could fall more than 50% from a year earlier while gasoline and gasoil demand will likely drop about 20% and 10%, respectively, he said.
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