- Published: September 2011
Japan CreditStats: Excess Capacity Continues to Plague Oil Industry Nov 00
- Published: November 2000
- Region: Japan
- Standard & Poors
The credit quality of the Japanese oil industry is expected to remain weak over the medium term, despite efforts by companies to improve their operations and profitability. Persistent excess supply, both at refineries and downstream service stations, combined with anemic growth in demand, will continue to pressure wholesale and retail prices, making it difficult for oil companies to fully transfer rising crude oil and other feedstock prices to consumers. Although Japanese oil companies are forming strategic alliances to cut costs, such consolidation is not expected to result in a meaningful reduction in production capacity. The Japanese refining market continues to face excess capacity, estimated at as much as 20%. Improvement in the industrywide supply-demand imbalance is likely to be slow,...
Companies mentioned in this report are: Cosmo Oil Co. Ltd.,TonenGeneral Sekiyu KK,Japan Energy Corp.,Showa Shell Sekiyu KK,Nippon Oil Corp.
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Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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Cosmo Oil Co. Ltd.,TonenGeneral Sekiyu KK,Japan Energy Corp.,Showa Shell Sekiyu KK,Nippon Oil Corp.