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Bloomberg: Showa Shell to Cut Jan. Output on Reduced Demand (Update1)

By Megumi Yamanaka

Jan. 21 (Bloomberg) — Showa Shell Sekiyu K.K., the Japanese unit of Royal Dutch Shell Plc, will join Nippon Oil Corp. and Cosmo Oil Co. in cutting crude processing this month as unusually warm weather reduces kerosene demand.

The Tokyo-based company will process 2.35 million kiloliters (14.8 million barrels) of oil in January, spokesman Ichiro Miyawaki said by phone today. It had planned to process 2.52 million kiloliters this month.

Nippon Oil and Cosmo Oil Co. last week said they would also cut processing for January because of flagging demand. Consumers bought less kerosene for heating due to warmer weather. The average temperature in Tokyo was 6.5 degrees Celsius (43.7 Fahrenheit) in the first two weeks of January, 0.7 degree higher than the average for the 30 years to 2000, according to Japan’s Meteorological agency.

Nippon Oil, Japan’s biggest refiner, on Jan. 15 said it will process 7 percent less oil than it previously planned. The following day, Cosmo Oil, Japan’s fourth-biggest refiner, announced its plan to trim output by 5 percent in January.

Showa Shell will export about 80,000 million kiloliters of gasoline and 100,000 kiloliters of jet fuel in January and February in order to reduce stockpiles, Miyawaki said.

To contact the reporter on this story: Megumi Yamanaka in Tokyo at [email protected] .

Last Updated: January 20, 2008 21:03 EST

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