Oil Prices Plummet Overnight! Brent Crude Approaches $60 Mark; Plastic Futures Decline Across the Board

I. Crude Oil Market Dynamics

On December 11th, concerns about long-term supply surplus risks outweighed the impact of unstable geopolitical situations, leading to a drop in international oil prices. NYMEX crude oil futures for the January contract fell by $0.86 per barrel to $57.60, a decrease of 1.47% compared to the previous period. ICE Brent crude futures for the February contract fell by $0.93 per barrel to $61.28, a decrease of 1.49% compared to the previous period. China's INE crude oil futures for the January 2026 contract fell by 3.1 to 441.2 yuan per barrel, with the night session dropping by 5.6 to 435.6 yuan per barrel.

Future Market Outlook

On Thursday, oil prices once again hit a new low for the week, with Brent crude getting closer to the $60 mark. It wasn't until after 2:30 AM when news broke that the U.S. was preparing to seize more ships transporting Venezuelan oil that oil prices recovered nearly half of the day's losses from their lows. The U.S. actions will target tankers potentially carrying other sanctioned crude oil, such as Iranian oil. The seizures have led to the suspension of at least three batches totaling 6 million barrels of Venezuelan Merey crude oil. The U.S. seizure of tankers could trigger a Venezuelan export crisis, forcing the market to seriously assess the impact of this event. Previously, multiple geopolitical events, such as Ukraine's continued drone attacks on Russian energy facilities and the damage to Kazakhstan's daily oil production by more than one-tenth due to the attack on the main oil export terminal (CPC), did not boost market sentiment to prevent the decline in oil prices.

The International Energy Agency (IEA) and OPEC both released their monthly reports on Thursday. OPEC consistently maintained a positive tone, while the IEA, for the first time since May, downgraded its forecast for the record oil supply surplus. Global oil supply is expected to exceed demand by 3.84 million barrels per day (compared to an estimated surplus of 4.09 million barrels per day in the November report). Although the surplus forecast has been reduced, the absolute amount remains excessively large. Despite both reports having positive aspects, they did not boost oil prices. Middle Eastern crude oil benchmark spot premiums fell across the board on Thursday, with Dubai crude prices hitting nearly a three-week low. The immense surplus pressure further dominated the movement of oil prices, making recent geopolitical disturbances insufficient to boost market sentiment and difficult to improve market expectations.

As mentioned yesterday, the oil market has once again entered a phase of competing pressures between supply surplus and geopolitical and macroeconomic factors. The noticeable intensification of geopolitical factors has caused disturbances in oil price movements, but the impact, as reflected in oil prices, is lower than expected. Increasingly evident data shows that the supply surplus, the most fundamental driver of oil price movements, is further pushing the bears to dominate. The focus of oil prices continues to shift downward, and the strategy remains to seize short-selling opportunities on rallies, while paying attention to the rhythm of the market.

Section 2: Macro Market Dynamics

1、The Central Economic Work Conference was held in Beijing from December 10th to 11th.The meeting emphasized that next year's economic work should focus on maintaining stability while seeking progress, improving quality and efficiency, leveraging the integrated effects of existing and new policies, and enhancing countercyclical and cross-cyclical adjustments to improve macroeconomic governance effectiveness. A more proactive fiscal policy should continue to be implemented, along with a moderately loose monetary policy.

1. The Central Economic Work Conference has determined eight key tasks for next year's economic work. First, adhere to domestic demand as the main driver and build a strong domestic market. Second, adhere to innovation-driven strategies and accelerate the cultivation and expansion of new driving forces. Third, persist in reform challenges to enhance the dynamism and vitality of high-quality development. Fourth, maintain openness to the outside world and promote win-win cooperation in multiple fields. Fifth, adhere to coordinated development to promote urban-rural integration and regional synergy. Sixth, adhere to the "dual carbon" leadership and advance comprehensive green transformation. Seventh, prioritize people's livelihood and strive to do more practical things for the people. Eighth, adhere to safeguarding the bottom line and actively and prudently resolve risks in key areas.

3、The spokesperson of the Ministry of Commerce, He Yadong, responded to questions related to Anshi Semiconductor yesterday.He said that recently, Wingtech Technology sent a letter to the independent directors and equity custodians of Anshi Holland, inviting them to China to negotiate on corporate control and the restoration of supply chain stability and smoothness, demonstrating sincerity in resolving the issue. The Chinese side has requested the Dutch Embassy in China and the Dutch Ministry of Economic Affairs to implement the consensus reached with the Chinese side and promote Anshi Holland to send representatives to China as soon as possible.

According to reports,The Mexican Senate has passed a new import and export tariff bill.Starting next year, tariffs ranging from 5% to 50% will be imposed on certain products from several Asian countries, including China. Foreign Ministry spokesperson Guo Jiakun stated that going against the trend of economic globalization and engaging in protectionism is detrimental and unhelpful. We hope that Mexico will promptly correct these erroneous practices, work together with China, and jointly maintain the overall situation of bilateral economic and trade relations.

5、The Federal Reserve reappoints 11 regional Fed presidents.To alleviate concerns about personnel uncertainty.

6、Insiders: The US, Ukraine, and Europe will hold a meeting in Paris on Saturday regarding the Russia-Ukraine conflict.

7、Zelensky responds to the issue of territorial compromise: Whether through elections or a referendum, the stance of the Ukrainian people must be demonstrated.

8、The U.S. Treasury Department is increasing sanctions on Venezuela. Reports indicate that the U.S. is preparing to seize more ships transporting Venezuelan oil, with 6 million barrels of oil shipments being held up.

III. Plastic Market Dynamics

Oil prices plummeted late at night! Brent crude briefly approached the $60 mark, and the main contracts for plastic-related futures all declined.

The PP2601 contract is quoted at 6133 yuan/ton, down 1.11% compared to the previous trading day.

PVC2601 contract reported at 4247 yuan/ton, down 01.51% from the previous trading day.

The plastic 2605 contract reported at 6525 yuan/ton, down 1.24% compared to the previous trading day.

Styrene contract 2601 is quoted at 6472 yuan/ton, down 0.8% compared to the previous trading day.

4. Today's Market Forecast

PE: Overall, the polyethylene fundamentals remain weak, with the market primarily focused on active destocking. Prices are expected to continue to decline, with a range of 20-100 yuan per ton.

PP: The polypropylene market is expected to experience weak fluctuations with opportunities for a weak rebound in the next period. Cost support from oil-based and PDH-based production is strengthening, and market activity is increasing due to the Federal Reserve's interest rate cuts.

PVC: It is expected that PVC prices will continue to weaken and decline in the next period. Domestic production will remain at a high level next week, while both internal and external demand pressures persist, leading to continued sluggishness. The cost-side support is anticipated to further weaken, and it is expected that the PVC market still has room for downward adjustment.