The four-month period from November to February normally sees an upturn in Northeast Asia heating oil imports, a boost for Asian oil refining.

But recession-hit Japan and South Korea are likely to stave off imports this winter and many homes will even shift to cheaper heating alternatives, analysts said.

"Kerosene demand will likely be stable compared to last year, even if it's quite a cold winter," said SB Kim, energy analyst at Jardine Flemming Securities in Seoul. "Most individuals have keen interest in more cost efficient alternatives."

Heating oil demand in South Korea in the first eight months of this year was down 35-per cent compared to same period last year, according to the Korea Petroleum Exploration and Development Corp (Pedco).

Correspondingly, Korea's kerosene imports have also fallen by more than 50-percent from 9.2 million barrels in 1997 to 4.6 million barrels in 1998, over the same period.

"The winter may improve overall position but things will not be rosy," George Goundry, an analyst at Hoare Govett Asia said. "Even if it's cold, Koreans will just put on an additional sweater."

Goundry forecast year-on year 1998 heating oil demand would still be off by 20 per cent, despite an expected year-end recovery.

More price sensitive consumers in Korea, amid the recession this year, have also turned on to piped natural gas, which was 25 per cent cheaper than kerosene, analysts said.

"They have to change their boilers from oil to gas as an entry cost. That's the hurdle," Kim said.

But he noted sales of gas-based boilers have increased by 30 per cent this year compared to a similar fall in oil-based boilers.

Usage of city gas, piped to most residential and commercial areas in the Seoul metropolitan area, has expanded to make 30-per cent of total energy consumption by resident and commercial sector inthe first half of this year, from 17-per cent in 1997, according to the Korea Energy Economics Institute.

In Japan, kerosene stocks remain high and for the end of October, they stood at 5.29 million kilolitres, a build of 800,000 kilolitres from September, according to the Ministry of Trade and Information on Wednesday.

"The Japan economy isn't doing well and things haven't changed. The weather is colder but its normal for this time of the year," one source at Japan's largest refiner Nippon Oil said.

"For October and first half November, we had warmer weather, so kerosene sales were terrible. We are not going to go out and import anything for the rest of the year," the source said.

On Tuesday, Japan's Meteorological Agency also said chances for normal temperature during December through February were 50-per cent, with only 30 per cent chance of lower-than-average readings.

Cosmo Oil, which had been the only Japan refiner to commit advance heating oil imports this year, is also reconsidering itsoptions now, according to sources close to the company.

Meanwhile, middle distillate stocks in swing supply centre Singapore have risen above 12 million barrels since end October, awaiting buyers.

Many traders holding onto these cargoes are now getting cold feet and as a result, benchmark Singapore jet-kerosene prices have started to ease this week.