UPDATE 2-Japan gas oil stocks at highest on record

JAPAN OIL STOCKS, CRUDE RUNS FOR WEEK TO AUG 23

23-Aug Week chg Year
chng

mln kl mln bbls mln bbls mln
bbls
Crude 15.49 97.4 +0.23
-6.73
Gasoline 2.01 12.66 +0.05
+0.80
Kerosene 3.26 20.53 +1.75
-3.14
Naphtha 1.59 10.0 -0.36
n/a
Crude runs (mln bpd) 4.1 -0.14
-0.17
Refinery util (pct) 83.7 -2.9 -4.6
(Adds comment, details)

By Osamu Tsukimori

TOKYO, Aug 27 (Reuters) - Japan's gas oil inventories rose
again in the week to Aug. 23 to hit the highest level since at
least 2003 amid signs of declining exports in response to
narrower profit margins.

Gasoline stocks in the world's third-biggest oil consumer
edged up 0.4 percent to 2.01 million kilolitres (12.66 million
barrels) over the same period, while output fell, suggesting
weak motor fuel demand near the end of the peak demand season
in the face of high oil prices.

Japan's gasoline sales, which typically make up more than a
quarter of Japan's total oil consumption, were 1.1 million kl
(986,000 barrels per day) in the week to Aug. 23, down 11
percent from the week before and 5 percent below the
year-earlier period, the Petroleum Association of Japan (PAJ)
said..

For a graphic showing inventories since 2006, click:
here

Gasoline sales may stay weak in the remaining days of
August as Japan's top oil refiner Nippon Oil Corp 5001.T,
which has about a quarter of the domestic gasoline market, said
it would cut its wholesale oil product prices by 5.1 yen per
litre from Sept. 1 to pass on a recent decline in crude import
costs.

PAJ data also showed crude stocks rose 0.2 percent to 15.49
million kl (97.4 million barrels), while kerosene stocks
increased 9.3 percent to 3.26 million kl (20.53 million
barrels) as refiners prepared for the peak winter season later
this year.

(For full data, click on [ID:nAPI000432])

Refinery utilisation in Japan, the world's third-largest
oil consumer, stood at 83.7 percent of total capacity of 4.9
million bpd, down 2.9 percentage points from the week before
and 4.6 percentage points below the year-earlier level,
reflecting the recent start of a planned maintenance shutdown
at Cosmo Oil Co (5007.T).

GAS OIL STOCKS BUOYED BY SLOW EXPORTS, DOMESTIC SALES

Stocks of gas oil, or diesel used in trucks and buses, rose
8.7 percent to 2.48 million kl (15.6 million barrels), the
highest level since the PAJ started releasing data in 2003,
although output was lowered to its lowest level since May,
suggesting weak domestic demand.

The stock level could be the highest since May 2001, said
one industry source.

Weekly exports of gas oil, or diesel, extended declines to
217,796 kl (1.37 million barrels), less than half the
three-month high of 476,271 kl shipped two weeks ago, as the
gas oil crack, or the premium of gas oil over crude oil, eased
to around $21 a barrel, down some $11 from a month ago and a
record above $45 touched in late May.

China imported bumper diesel volumes over the past months
to ensure sufficient supplies during the Olympics, after a
severe squeeze late last year, but the world's second-largest
oil consumer is now reducing imports just as rapidly.

"Exports play a large role in gas oil stocks, and this is a
reflection that exports to Asia is slowing," said Kaname Gokon,
a manager in Okato Shoji Co's research section.
(Reporting by Osamu Tsukimori; Editing by Michael Urquhart)