International Crude Oil Prices Rise! Plastic Market Fluctuates Narrowly

1. Overnight Crude Oil Market Dynamics

On September 23, the instability of the Russia-Ukraine situation remains, and the United States may escalate sanctions against some oil-producing countries, leading to a rise in international oil prices. NYMEX crude oil futures for the November contract rose $1.13 per barrel to $63.41, a 1.81% increase compared to the previous period. ICE Brent crude futures for the November contract rose $1.06 per barrel to $67.63, a 1.59% increase compared to the previous period. China's INE crude oil futures for the 2511 contract fell by 8.9 to 475.3 yuan per barrel, while the night session rose by 7.0 to 482.3 yuan per barrel.

Market Outlook

Oil prices surged on Tuesday, rebounding $2 from the intraday low and quickly recovering most of the ground lost in recent days, once again defusing the risk of a breakdown. The tug-of-war between bulls and bears continues. During the Asian session, SC crude oil at one point led the global market in a downward breakout, but after the Middle East window, oil prices rebounded during the European session. The OECD raised its forecast for global economic growth in 2025 to 3.2%, up from the previous 2.9%, which is bullish for oil demand growth. Additionally, the main driver behind the sharp rise in oil prices is the market's renewed reports of Ukraine continuing to attack Russian oil facilities, with Russia stating it may extend the ban on refined oil exports if necessary. Furthermore, Trump announced strong tariff sanctions against Russia, stating that after fully understanding the military and economic situation between Russia and Ukraine and seeing Russia plunged into economic difficulties, he believes that with the support of the EU, Ukraine has the capability to fight and reclaim all its original territories. Clearly, the recent primary goal of Western countries and Ukraine is to pressure Russia’s finances by various means of targeting Russian oil exports to force it to cease hostilities. The resurgence of geopolitical tensions and sanction waves has helped oil prices break free from the low end of the range, continuing the tug-of-war within the range.

It is noteworthy that during the night session, the domestic high-sulfur fuel oil market saw a significant increase in positions and a rise in prices, likely influenced by the impact on high-sulfur supply following the attack on Russia. This creates cost pressure for refineries that need to supplement their materials with high-sulfur oil due to tight quotas in the domestic market for the second half of the year. The API data released at midnight showed a decrease in crude oil inventories by 3.821 million barrels, in line with market expectations.

Recently, risk assets have shown significant emotional fluctuations again. On Tuesday, during the day, the domestic stock and commodity markets experienced a systemic plunge, amplifying the decline in crude oil. However, during the night session, the continued strength of the U.S. stock market boosted market risk appetite, which also helped the oil price rebound to new highs. Geopolitical factors, combined with sanctions and the continued expectation of oversupply, have maintained the tug-of-war pattern in oil prices. European Brent crude oil has recently performed significantly better than other markets, and its spread structure has been strengthening, fully reflecting the impact of geopolitical disturbances. In contrast, SC crude oil is generally weaker than the European and American markets. In terms of opportunities, the focus remains on seizing the chance to short after a rebound to new highs, paying attention to the timing and participating cautiously.

Section 2: Macroeconomic Market Trends

1. Federal Reserve Chairman Powell:The policy interest rate remains slightly restrictive.However, it enables the Federal Reserve to better respond to potential economic developments; tariffs are expected to be a one-time transmission effect; decisions "will never be based on political factors." The "Fed's mouthpiece" pointed out.Powell's remarks indicate that he believes interest rates are still relatively tight, which may open up room for further rate cuts.

2. Federal Reserve's Goolsbee: Currently not considering a 50 basis point rate cut. The final Fed rate may stabilize around 3%; Governor Bowman: Anticipates three rate cuts in total by 2025; Bostic: Believes the current real neutral rate is 1.25%.In a future phase, it may be possible to set the inflation target range at 1.75% to 2.25%.

3. U.S. President Trump:If Russia is unwilling to reach an agreement, the United States is prepared to impose additional tariffs.；Ukraine has the capability to reclaim all lost territories with the support of the European Union.；北约国家应在俄罗斯飞机进入北约空域时将其击落；"The relationship with Putin is unfortunately meaningless."

Polish Prime Minister Tusk stated that the border crossing with Belarus will be reopened in the early hours of the 25th.

5、Trump cancels meeting with Democrats regarding the temporary funding bill, stating that the meeting is unlikely to yield results.

6. According to the International Information Agency:Russia may extend the gasoline export ban and is also discussing the possibility of a diesel export ban.。

Foreign Minister Wang Yi meets with a delegation of U.S. Congress members.This visit can be considered as an ice-breaking journey.The diplomacy of heads of state plays an irreplaceable leading role. Currently, the China-U.S. relationship has shown signs of stabilization, which is hard-won and worth cherishing. Zhao Leji, Chairman of the Standing Committee of the National People's Congress, also met with a delegation of U.S. Congress members.

Li Chenggang, the International Trade Negotiator and Vice Minister of the Ministry of Commerce, met with a delegation of political and business leaders from the Midwest region of the United States.

3. Plastic Market Dynamics

On Tuesday, international oil prices rose.The plastic market is fluctuating within a narrow range.

The plastic 2601 contract is quoted at 7,133 yuan/ton, up 0.35% from the previous trading day.

The PP2601 contract is priced at 6869 yuan/ton, an increase of 0.28% compared to the previous trading day.

The PVC2601 contract is quoted at 4884 yuan/ton, a decrease of 0.39% compared to the previous trading day.

The styrene 2511 contract is quoted at 6918 yuan/ton, an increase of 0.77% from the previous trading day.

IV. Today's Market Forecast

In the short term, the supply side is returning beyond expectations, inventory is accumulating downward, while the demand side is slowly catching up, providing weak support. As the National Day holiday approaches, suppliers are entering a critical time for destocking. However, the current factory reception is limited, making it difficult to alleviate the pressure caused by the supply side. It is expected that short-term prices will mainly fluctuate within a range.

PP: The expectation of peak season is hard to fulfill, and downstream factories are consistently unable to take large volumes, making it difficult to boost market prices. Price rebound faces many challenges. Moreover, with the upcoming National Day/Mid-Autumn Festival holidays, downstream factories show little desire to stock up, and post-holiday destocking will also weigh on price increases. It is expected that the polypropylene market will experience fluctuations and consolidation today, with the mainstream price of East China raffia at 6700-6830 yuan/ton.

PVC: The macro and industrial expectations for PVC are not performing well, with no new news affecting the market before the holiday, resulting in a weak trend. The demand for spot PVC is sluggish, and the enthusiasm for terminal stocking before the holiday is generally low. Additionally, after the holiday, PVC supply will face pressure from new production capacity, increasing supply-demand conflicts, and raising inventory accumulation pressure in the industry. The focus of spot market prices is expected to be lower, with the cash and carry price for calcium carbide-based PVC Type 5 in the East China region anticipated to be in the range of 4600-4780 yuan/ton.