UPDATE 2-Japan kerosene stocks stand at lowest in 3 decades

* Refinery utilisation falls to 3 1/2-month low of 68 pct

* Kerosene stocks down nearly 13 percent from a year ago

* Kerosene stocks lowest in at least 3 decades
(Adds details, tables)

By Osamu Tsukimori

TOKYO, Oct 15 (Reuters) - Japan's kerosene stocks rose 2
percent last week but stayed at the lowest in at least three
decades for this time of year, while refinery runs dropped
below 70 percent of capacity for the first time in over three
months, reflecting weak demand and maintenance at plants.

Stocks of kerosene for heating rose to 3.34 million
kilolitres in the week to Oct. 10, which is down nearly 13
percent from a year-ago level, reflecting a sharp decline in
demand, the Petroleum Association of Japan (PAJ) said.

Kerosene inventories are at the lowest for the second week
of October in at least three decades, according to a Reuters
calculation based on government data. Many households in the
nation except the colder northern region have switched to
electricity or gas for heating needs.

Japan's official forecaster predicts mostly
warmer-than-average weather this winter, which could limit the
use of heaters and dampen energy demand further. [ID:nT46990]

"Despite the refinery runs falling below 70 percent, the
oil product inventories are not low at all, another reminder of
sluggish demand," said a broker in Tokyo who declined to be
identified.

The appetite for petroleum for industry use has remained
particularly dull as photo film makers and paper manufacturers
have switched fuel for their boilers from oil to natural gas,
contributing to a rapid decline in demand in the world's
third-biggest consumer.

The refinery utilisation rate dropped by 2.9 percentage
points to 68.0 percent last week, the lowest since late June.
The plant run rate is down 3.1 percentage points from the same
period a year ago, reflecting maintenance shutdowns at a few
refineries and slack demand.

Crude oil stocks in the world's third-biggest oil consumer
declined by 4 percent, or 613,000 kl (3.9 million barrels),
from the week before to 14.45 million kl (90.91 million
barrels). Stocks were still up from a 29-year low of 13.8
million kl hit in the week to Sept. 26.

For a selection of graphics based on PAJ data, click
[ID:nT75530].

Gasoline stocks fell 2 percent to 2.04 million kl. Gasoline
demand last week was 17 percent above the previous year's
level, Reuters calculations showed. (For details, see table
below.)

The data's release was delayed by a day due to a national
holiday on Monday.

(For full data, click on [ID:nAPI000413])
---------------------------------------------------------------

JAPAN OIL STOCKS, CRUDE RUNS FOR WEEK TO OCT 10

10-Oct Week chg Year
chng

mln kl mln bbls mln bbls mln
bbls
Crude 14.45 90.91 -3.85
-22.23
Gasoline 2.04 12.86 -0.29
-0.25
Kerosene 3.34 20.98 +0.45
-3.08
Naphtha 1.9 11.95 +0.55
n/a
Crude runs (mln bpd) 3.31 -0.14
-0.17
Refinery util (pct) 68.0 -2.9
-3.1
WEEKLY DOMESTIC OIL SALES*

mln bpd Week/Week Year/Year
Total oil product sales 2.64 2.4% 1.9%
Gasoline 0.98 22.5% 17.4%
Naphtha 0.21 -42.8% -23.5%
Jet fuel 0.134 215.3% 46.6%
Kerosene 0.2 -15.5% 15.2%
Gas oil 0.57 -13.7% 5%
A-fuel oil 0.25 -0.5% 2.9%
C-fuel oil 0.3 31.7% -31%
* Oil sales and percentage change figures based on Reuters
calculations, taking into account the change in inventories,
production, imports and exports. Figures are in million barrels
per day.
---------------------------------------------------------------

FLAGGING EXPORTS

Oil exports last week fell to a four-week low of 463,000
kl, which is down 38 percent from a year ago.

With little room for exports to offset domestic demand,
Japanese refiners are likely to come under pressure to keep
heavy cuts in refining.

Japanese oil demand in September looks to have declined by
its widest amount in five months, falling around 10 percent to
the lowest level for the month in 23 years. [ID:nT326244]

Japan's top refiner, Nippon Oil Corp 5001.T, said on
Thursday it plans to keep shut the 110,000 barrels per day
(bpd) No.2 crude distillation unit (CDU) at its Mizushima
refinery in western Japan until the end of March 2010 if
domestic oil demand stays stagnant. [ID:nT74713]
(Editing by Michael Urquhart)