Crude Oil Opens Sharply Higher And Closes Higher Amid Volatility; Polyethylene Weak

I. Overnight Crude Oil Market Dynamics

April 20: The second round of U.S.-Iran talks has not been officially confirmed yet. The Strait of Hormuz remains blocked, increasing concerns about supply risks, and international oil prices rose. The NYMEX crude oil futures contract for May rose by $5.76 per barrel to $89.61, an increase of 6.87% from the previous session; the ICE Brent crude oil futures contract for June rose by $5.10 per barrel to $95.48, an increase of 5.64% from the previous session. The China National Energy Administration (INE) crude oil futures contract for June 2026 fell by 31.2 to 605.7 yuan per barrel, and during the night session, it rose by 10.8 to 616.5 yuan per barrel.

Market outlook

On Monday, oil prices opened significantly higher, recovering most of Friday’s losses, and then entered a seesaw trading pattern throughout the day. Since Friday evening, the entire crude oil market has been thrown into chaos, forcing investors to remain patient while awaiting greater clarity. Following Iran’s weekend closure of the Strait of Hormuz, the previously cooling geopolitical situation has once again become highly uncertain. Markets are closely monitoring the progress of U.S.-Iran negotiations. The United States explicitly stated it would continue negotiations this week; on Monday evening, former U.S. President Donald Trump announced that U.S. Vice President JD Vance and the U.S. delegation were traveling to Pakistan for the next round of talks, and Pakistani sources also indicated that Iran would participate in this week’s negotiations—contributing to the decline in oil prices. However, Iranian official sources stated that due to repeated shifts in U.S. rhetoric and actions, Iran harbors “deep distrust” toward the United States and has not yet decided whether to attend the second round of U.S.-Iran negotiations. Overall, it appears both sides desire a ceasefire: the U.S. lacks time, whereas Iran seeks greater concessions. Further clarity on whether negotiations will proceed smoothly is expected by late Tuesday.

II. Macroeconomic Market Dynamics

1. Trump:It is “extremely unlikely” that the ceasefire agreement with Iran will be extended.Vance will head to Pakistan later on Monday; the Strait of Hormuz will not be opened before the agreement is signed; the ceasefire agreement will expire at 10 p.m. Washington time on the 22nd (23rd morning Beijing time); if it expires, bombs will explode; considering Pakistan's suggestion regarding the blockade against Iran; denying being dragged into it by Israel.

2. U.S. mediaThe U.S. and Iran plan to hold talks on Wednesday; the United States will host the second round of Lebanon-Israel talks on Thursday.

3. Spokesperson for the Iranian Ministry of Foreign Affairs:There are currently no plans for a second round of negotiations with the United States.The transfer of enriched uranium has never been mentioned, and it is impossible to unilaterally restore traffic through the Strait of Hormuz; Iranian media: Iran's decision not to participate in negotiations remains unchanged.

4. A senior Iranian official stated: “Iran is actively reviewing its participation in the negotiations and has not yet made a final decision. Pakistan is currently actively mediating to urge the United States to lift its maritime blockade against Iran to ensure Iran’s participation in the negotiations.”

5. The Pakistani side still expects the Iranian delegation to arrive in Islamabad on Tuesday, with Pakistani officials stating that Iran is willing to participate in the second round of negotiations.

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8. On the 20th, the State Council held its 19th specialized study session, themed “Coordinating Energy Security and Green, Low-Carbon Transformation to Accelerate the Construction of a New Energy System.” Premier Li Qiang of the State Council presided over the session and emphasized the need to thoroughly study and implement General Secretary Xi Jinping’s important instructions on building an energy powerhouse, as well as the relevant decisions and deployments of the CPC Central Committee; to implement the new national energy security strategy; to advance the optimization and adjustment of the energy structure; and to deepen reforms in energy systems and mechanisms—thereby providing a solid energy foundation for accelerating comprehensive green transformation and high-quality development.

Caixin journalist has exclusively learned that CATL plans to release technology products related to sodium-ion, condensed state, and fast charging at the "Super Technology Day" held today.

III. Plastic Market Dynamics

As the optimistic messages released by Trump over the weekend were refuted one by one by Iran, the prospect of U.S.-Iran peace talks remains uncertain. International oil prices opened higher on Monday and then fluctuated to close with gains, while the plastic futures market remained weak.

Plastic is quoted at 7,932 yuan/ton, down 0.45% from the previous trading day.

PP is quoted at 8164 yuan/ton, down 0.97% from the previous trading day.

PVC was quoted at RMB 5,127 per ton, up 0.18% from the previous trading day.

Styrene was quoted at RMB 9,682 per ton, down 1.23% from the previous trading day.

IV. Today’s Market Forecast

PE: In the short term, market sentiment turns bearish, and international oil prices are expected to decline, thereby weakening cost support compared to previous levels.

PP: Production plant run rates are expected to remain reduced, with domestic supply continuing to tighten, providing some support to spot prices. However, downstream resistance to high prices is evident, and buying sentiment remains cautious, leading to strong market sentiment. The polypropylene market is expected to trend weakly sideways this week.

PVC: In the short term, reduced production from the ethylene-based process alleviates market supply pressure; however, both domestic and export demand remain weak, and the PVC spot market is expected to trade within a range.