Saudi Arabia crude exports: Earlier today, information from Joint Organizations Data Initiative (JODI) showed crude exports in November from Saudi Arabia had reached highest level in eight months. The export volume was at 6.206 million barrels per day (bpd) for the month which was 4.7% greater than the 5.925 million bpd during October. This export increase occurred even though overall Saudi crude production was down to 8.925 million bpd November after October was at 8.972 million bpd. In December, OPEC+ delayed output increases until 2nd quarter of 2025 and also extended, to the end of 2026, its full unwinding of cuts.
U.S. trucking activity: Earlier this month, the American Trucking Associations (ATA) forecast that trucking volumes would grow by 1.6% in 2025 after achieving 11.27 billion tons hauled during 2024 (which generated $906 billion of revenue) and it also estimated that it would be at nearly 14 billion tons hauled annually in 2035, an increase of around 24% over that decade. This is certainly a positive outlook after the last two years of declines. Yet, in December, U.S. trucking activity did fall from the previous month which marked a second consecutive month of such declines and activity was at lowest level since previous January. Trucking represents 72.7% of tonnage carried by all modes of domestic freight transportation and is a key indicator of U.S. economic activity.
China crude imports: Per outlook from China National Petroleum Corp (CNPC), the country’s crude oil imports will rise by only about 1% in 2025 as they will import the equivalent of roughly 11.18 million bpd to support the world’s second-largest refining industry. This minimal increase (after actually fell in 2024) matches views by analysts who deem demand from world’s top crude oil buyer to be near a peak considering subdued economic growth and vehicle electrification. In addition, from 2024 to 2030, itis suggested gasoline and diesel consumption are to fall by around 25% while aviation fuel is expecting growth of about 30% during this period.
Market Overview: The U.S. dollar is a bit weaker this morning as it hovers near two-week lows. This weakness generally provides support to oil prices and West Texas Intermediate (WTI) crude is showing minimal movement early as is looking for direction on first day since front month has switched to MAR25. Products are lower with ULSD distillate contract off around $0.02 with $2.4183 next support level to downside.
Crudeshipping freight rates on rise
In early January the U.S. provided wider sanctions on Russia which is resulting in expectations of tightening global tanker supply. Very Large Crude Carriers (VLCCs) are getting booked at a brisk pace and there has been about a 15% rise in rates and chartering a supertanker from the Middle East to China now costs about $4.1 million. Shipping crude from U.S. Gulf to China has seen a $1.895 million increase (or more than 27%) to $8.715 million for that voyage. Rates could rise further as February booking activity is also anticipated to be strong. These shipping costs will be one area to watch as Trump administration looks to aid finding resolve to Russia/Ukraine fighting.
The market eased further today as there is much consideration of how President Trump's proposed tariffs could affect demand for energy as well as global economic growth. Today's WTI crude contract settled at $75.44 (or down $0.39) which represents lowest settle since January 9th. Products were also lower as RBOB gasoline fell $0.0265 (to $2.0578) and ULSD distillates were off $0.0739 (to $2.4842). The American Petroleum Institute (API) will also provide weekly inventory update later this afternoon.
