UPDATE 1-Japan mild winter temps could hit fuel demand

Published: 24 Nov 2009 23:18:02 PST

* Japan December-February weather seen above average -JMA

* May limit heating demand; lessen need for crude, fuel buys

TOKYO, Nov 25 - Japan will see mostly milder than average weather from December-February, the official forecaster said on Wednesday, likely limiting heating demand and thermal fuel consumption for the winter season.

Both eastern Japan, including the densely populated Tokyo area, and western Japan, have a 50 percent chance of milder temperatures for the period, the Japan Meteorological Agency said in its three-month forecast.

The northern region, the Asian nation's main heating oil market, is also likely to see mostly above average temperatures for the period. For details, see table below.

Milder winter weather would likely limit consumption of kerosene, sales of which typically peak around January, as well as eat into demand for electricity, since many Japanese households use electric-powered heaters.

Such a move would dampen Japan's appetite for crude oil for the season, especially for light sour grades, which have a high kerosene yield, and direct-burning crudes, which are often burned by Japanese utilities for power generation.

The following figures express the percentage probability of temperatures in the coming months being below average, seasonally average, or above average.

The agency's previous month's forecasts are in parentheses.

Forecasts for December-February

BELOW AVERAGE ABOVE

North 30 30 40

East 20 30 50

West 10 40 50

Okinawa, Amami Islands 10 30 60

Forecast for December

BELOW AVERAGE ABOVE

North 20 (30) 40 (30) 40 (40)

East 20 (20) 30 (40) 50 (40)

West 20 (20) 40 (30) 40 (50)

Okinawa, Amami Islands 20 (20) 40 (30) 40 (50)

Forecast for January

BELOW AVERAGE ABOVE

North 30 (30) 30 (30) 40 (40)

East 20 (20) 40 (40) 40 (40)

West 20 (20) 30 (40) 50 (40)

Okinawa, Amami Islands 20 (20) 30 (30) 50 (50)

Forecast for February

BELOW AVERAGE ABOVE

North 30 30 40

East 20 40 40

West 20 30 50

Okinawa, Amami Islands 20 30 50 (Reporting by James Topham and Miho Yoshikawa; Editing by Joseph Radford) ((james.topham@thomsonreuters.com; +813 6441 1858; Reuters Messaging: james.topham.reuters.com@reuters.net)) (