Japan’s crude oil stocks dropped  0.8 per cent to its lowest since mid-December, industry data showed, but the fall is unlikely to alarm refiners who are planning to cut output due to weak demand.

Crude inventories in the world’s third-largest oil consumer fell by 124,000 kilolitres (0.8 million barrels) to 15.12 million (95.1 million barrels) in the week to Jan. 12, the Petroleum Association of Japan (PAJ) said.
The stocks were now near their lowest level since early-2006.
The decline came as Japanese refiners boosted the refinery utilisation rate by 1.1 per centage point to 90.4 per cent.
Analysts said they were not worried about the low stock levels since some refiners had announced plans to cut production to match slow domestic demand amid high oil prices.
Cosmo Oil Co said it had cut its crude refining for January by 140,000 kilolitres (about 28,000 barrels per day) from its original plan to 2.719 million kl, following a similar announcement by Nippon Oil earlier this week. The cut in crude processing by Nippon Oil and Cosmo alone equals about 66,000 kl per week, Reuters calculations show.
An industry source said some other Japan-based refiners including Exxon Mobil’s Japan group could also cut output.
Stocks of kerosene for heating fell 43,000 kl (about 270,000 barrels) from the week before to 4.14 million kl as output declined, indicating slow sales and a mild start to the peak winter season.
Analysts said the latest kerosene stocks stood around eight per cent lower from a year earlier.
“Kerosene demand is really down in central Japan and compared to gas and electricity, kerosene is expensive,” said Akira Kamiyama, a derivatives trader at Mitsui & Co.
“Since the start of the new year, it hasn’t been really cold in Western Japan, and even if it gets colder, I don’t expect demand for kerosene to increase significantly.”