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Japan's leading refining company Nippon Oil Corp. has announced that it expects to cut crude refining output by approximately 22 percent in March compared to the same month last year, due to the global economic downturn and a drop in domestic demand, Reuters reports.

The projected figure of 810,000 barrels per day during the month of March is set to mark the fifth month in succession that the Japanese refiner and bunker supplier curbs refining output by over 10 percent.

The cut also takes into account Nippon Oil's scheduled maintenance of a crude distillation unit (CDU) at its Osaka refinery between March 8th and April 1st. The unit is able to process 115,000 barrels per day.

A decrease in oil demand from Japan -the world's third-biggest oil consumer - is also set to have an impact on global oil demand and the price of crude oil, which has already dropped by over $100 per barrel since reaching a peak in July 2008.

The scheduled cut in refinery runs by Nippon Oil next month is also likely to lead to a reduction in fuel oil output, which could have an effect on the availability of marine fuels during this period.

Refining volumes in February 2009 are expected to be approximately 4.05 million Kilolitres per day (817,000 barrels), down 16 percent from the previous year and lower than previous estimates of 4.24 million kilolitres.

In October 2008, Nippon Oil strengthened its position in the marine lubricants market with the purchase of a 55 percent stake in lubricants manufacturer ItalSing Petroleum Company Pte Ltd. (ItalSing)

Joint venture partners Singapore Petroleum Company Limited (SPC) and Eni International B.V. (ENI) sold their shares to Nippon Oil, but each continue to hold 22.5% in ItalSing after the sale.

The newly-acquired majority stake in Italsing, which also produces lubricants for the marine industry, is set to pave the way for Nippon Oil to expand its lubricant sales in Southeast Asia.