Brent North Sea oil for delivery in September spiked to US$107.4 while oil on the Nymex rose to US$91.8. Oil prices ended the previous week at seven-w

23-Jul-12

Japanese oil refiner Idemitsu Kosan Co has shut the 220,000 bpd No. 2 crude distillation unit (CDU) at Chiba refinery, on Thursday evening after a fire near the CDU's naphtha circulation lines, as per Reuters. Idemitsu shut a third of its capacity after a fire, the latest outage in Japan that could reduce the country's crude demand and curb fuel exports. A few days ago, Japan’s largest refiner JX Nippon Oil & Energy Corp started shutting down a refinery for an unexpected safety check that could last a few months, and Cosmo Oil Co has extended indefinitely maintenance on a crude unit at its Chiba plant. Without definite restart schedules, the total of 560,000 barrels per day (bpd) in sudden and extended shutdowns of refining capacity could reduce demand for Middle East crude, as well as curbing the country's diesel exports and buoying regional premiums for the product. Idemitsu's shutdown is not expected to impact naphtha and low sulphur fuel oil (LSFO). No naphtha crackers were shut while high stockpiles of the light product in Chiba could also cushion the impact of refinery shutdowns.