Global Oil Prices Surge Further; Plastics Market Mostly Rises

Overnight Crude Oil Market Dynamics

Market concerns over the potential closure of the Strait of Hormuz leading to supply restrictions, coupled with ongoing geopolitical risks, have pushed international oil prices higher. The NYMEX crude oil futures April contract rose by $6.35 to $81.01 per barrel, an 8.51% increase; the ICE Brent crude oil futures May contract increased by $4.01 to $85.41 per barrel, a 4.93% rise. China's INE crude oil futures 2604 contract climbed 41.7 to 665.7 yuan per barrel, with the night session adding 8.3 to reach 674 yuan per barrel.

Market Outlook

The current stage of the geopolitical situation has entered a critical phase. Due to Iran’s unexpectedly strong resilience, the U.S. is compelled to prepare for a prolonged conflict. However, if hostilities devolve into a protracted war, upward pressure on oil prices will persist. The evolving military situation between the U.S. and Iran, as well as the navigability of the Strait of Hormuz, will continuously influence investors’ oil price assessments. Additionally, after this week’s consecutive sharp gains—accumulating substantial increases—any minor news-related developments could trigger significant oil price volatility. Investors must closely monitor the effectiveness of U.S. measures aimed at cooling oil prices. When participating in the current market, investors must elevate risk management to the highest priority and exercise extreme caution.

II. Macro Market Dynamics

1. Middle East Conflict — ① Iranian Deputy Foreign Minister Larijani stated that Iran has not yet selected a new Supreme Leader and is prepared to abandon its nuclear program, provided the U.S. presents a satisfactory alternative proposal. ② U.S. military preparations for potential operations against Iran are reportedly underway, with planning extending up to 100 days or even into September. ③ Iran claimed it destroyed the headquarters and ammunition depots of Western-backed separatist armed groups. ④ Trump said he must personally be involved in arranging Iran's leadership succession, stating he will not accept the son of Khamenei as the next Supreme Leader, and encouraged Kurds to launch attacks against Iran. He added that Iran is now calling to seek a deal, but it may be too late.

2. Energy Situation — ① White House officials:It is expected to announce measures to address oil prices as early as Thursday, which may include intervening in the oil futures market.It is reported that Japanese oil refining companies have requested the government to use national oil reserves. The Iranian Revolutionary Guard stated that it has the right to control the passage and navigation in the Strait of Hormuz during wartime, and to prohibit ships from the U.S., Israel, and Europe from passing through the Strait of Hormuz. Saudi Arabia has set the official selling price of crude oil exported to Asia in April at a premium of 2.5 dollars over the average price of Oman/Dubai crude.

3、Trump: We want to take care of Iran first, but Cuba is just a matter of time.

4、The U.S. is proposing legislation to expand AI chip export controls globally, requiring companies like NVIDIA and AMD to obtain licenses for exports.

The government work report proposed the main expected development goals for 2026: economic growth of 4.5%-5%, striving for better results in actual work; and a consumer price inflation increase of around 2%.

6. The Fourth Session of the 14th National People's Congress will hold a press conference today at 3:00 p.m. in the Media Center Press Conference Hall, inviting Zheng Shanjie, Director of the National Development and Reform Commission; Lan Fuan, Minister of Finance; Wang Wentao, Minister of Commerce; Pan Gongsheng, Governor of the People's Bank of China; and Wu Qing, Chairman of the China Securities Regulatory Commission, to answer questions from Chinese and foreign journalists on issues related to development and reform, fiscal budgets, commerce, finance, and securities.

III. Plastic Market Dynamics

The war disrupted supplies and shipping, and on Thursday, international crude oil prices rose, with more gains than declines in plastic futures.

Polyethylene 2605 contract quoted at 7409 yuan/ton, up 0.07% from the previous trading day;

The PP2605 contract was quoted at 7477 yuan/ton, a decrease of 0.09% from the previous trading day.

PVC2605 contract was quoted at 5052 yuan/ton, up 0.66% from the previous trading day.

Styrene contract 2605 quoted at 8673 yuan/ton, up 3.16% from the previous trading day.

IV. Market Forecast

PP: The market is expected to trend stronger upward next week before giving back gains, as the current rally is driven by heightened geopolitical concerns. Short-term worries over Iran's geopolitical situation remain elevated, and market gains will continue to follow developments in the region. However, high prices are facing pressure from weakening demand, limiting trading volume.

PE: Overall, supply and demand data have strengthened compared to the previous period, and under the strong support of costs and the impetus of market sentiment, it is expected that the price of polyethylene may continue to rise in the next period.

PVC: PVC prices are expected to continue rising next period. Domestic operating rates will remain high next week, while demand is gradually improving and downstream product manufacturers’ operating rates are expected to increase. On the cost side, ethylene prices continue to rise, providing support; geopolitical conflicts are driving up commodity prices across the board, and the PVC market is expected to maintain a positive trend.