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UPDATE 1-Showa Shell cuts crude refining on weak demand

Tue Sep 9, 2008 11:08pm EDT

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TOKYO, Sept 10 (Reuters) - Japan's Showa Shell Sekiyu KK (5002.T) plans to cut its crude refining volume in September-December by 400,000 kilolitres (about 21,000 barrels per day) or 4.4 percent from the same period last year, becoming the latest Japanese refiner to do so amid slack demand.

Showa Shell, Japan's fifth-biggest oil refiner, plans a refining volume of about 8.6 million kilolitres (443,000 bpd) from September to December, down from about 9.0 million kilolitres (464,000 bpd) last year.

The move comes after Idemitsu Kosan Co (5019.T), Japan's No. 3 oil refiner, said last week it would cut fourth-quarter crude refining by 14 percent. Nippon Oil Corp (5001.T), Japan's biggest oil refiner, said last month it planned to refine 3 percent less crude oil in September than in the same month last year. [ID:nT135565] [ID:nT25283]

Japan's oil demand has been falling gradually as the population declines and drivers shift to more fuel-efficient cars, and recently demand has also weakened after oil prices rose to a record near $150 a barrel in mid-July.

Domestic oil sales fell 2.4 percent in the year ended March, and government data showed last month that Japan's oil demand fell to its lowest in 19 years for the month of July as surging oil prices hit gasoline and kerosene use hard. [ID:nT86036]

Adding pressure, the weather in Japan is forecast to be warmer-than-average from September to November, the Japan Meteorological Agency said late last month, limiting demand for kerosene. [ID:nT357621] (Reporting by James Topham; Editing by Chris Gallagher)



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