Overnight Crude Oil Market Dynamics

The United States has extended sanctions on certain oil-producing countries, raising market concerns over potential supply risks, leading to an increase in international oil prices. NYMEXCrude Oil FuturesThe May contract rose by $0.27 to $69.92 per barrel, a month-on-month increase of 0.39%; ICE Brent crude futures for May rose by $0.24 to $74.03 per barrel, a month-on-month increase of 0.33%. China's INE crude oil futures main contract 2505 increased by 4.0 to 543.4 yuan per barrel, and fell by 0.4 to 543 yuan per barrel during the night session.

Outlook on the market outlook

Oil prices fell first and then rose on Thursday, closing with a long lower shadow. After continuous rebounds, the pace of increase slowed down. During the Asian session, oil prices started to fall back from their highs. In the rebound over the previous three weeks, Brent crude had accumulated an increase of about $6, while SC crude oil rebounded by 46 yuan. Sanctions and geopolitical disturbances have been fairly priced in. Just as oil prices were about to adjust, news during the night session revealed that multiple European countries came out to accuse Russia, stating they would not lift sanctions against Russia. The EU chose to support Ukraine more vigorously in an attempt to pressure the US and Russia to gain the initiative on the Russia-Ukraine issue. Russian President Putin said that Russia is ready to cooperate with Europe to resolve the Ukraine issue, but they are attempting to lead Russia by the nose. Meanwhile, Trump’s goal is very clear: to quickly achieve a ceasefire, as the US is unwilling to continue funding Ukraine. Previously, Medvedev’s views on social media were more direct: “The phone call between President Putin and President Trump proved a well-known idea — there are only Russia and the US in the restaurant. The menu includes: appetizers — Brussels sprouts, British fish and chips, and Paris rooster. The main course is Kiev cutlets. Enjoy your meal!” Obviously, Europe does not want to be the dish on the table, but also wants to pull up a chair and sit down. The game of interests among all parties has once again drawn market attention, which allowed oil prices to rebound and recover from the adjustment, shaking off the intraday losses. Geopolitical factors continue to affect oil price fluctuations. From the recent mutual accusations between Russia and Ukraine on non-compliance with the ceasefire on energy facilities, it can be seen that the process of resolving the Russia-Ukraine conflict will still be very tortuous. All parties, based on their own interests, will continue to play the game, which will also continuously disturb oil prices in terms of geopolitics. Overall, these geopolitical disturbances are still relatively controllable, so market participants are very cautious about the geopolitical premium.

As oil prices gradually approach the resistance zone, the momentum has shifted from a previous strong rally to a high-level tug-of-war phase. Capital is weighing the combined impacts of sanctions, geopolitical factors, and U.S. tariffs. Based on current performance, if there is no significant escalation of geopolitical tensions, it will be difficult for oil prices to continue to surge. It is necessary to remain vigilant about changes in market sentiment and expectations, as oil prices will continue to experience high volatility, and attention should be paid to rhythm management.

II. Macro Market Dynamics

The number of initial jobless claims in the U.S. fell by 1,000 to 224,000 last week, compared to an expected 225,000. The number of continued claims for the previous week dropped by 25,000 to 1.856 million, below the expected 1.888 million, indicating that the U.S. labor market remains in good condition.

◎The Central Bank of Mexico announced a 50-basis-point cut in the benchmark interest rate to 9.0%, in line with expectations.

The Brazilian Central Bank stated in its quarterly "Monetary Policy Report" that the Brazilian economy is expected to grow by 1.9% in 2025, which is a downward revision from the 2.1% growth forecast in the previous December's quarterly report. The report also indicated that by the first three quarters of 2025, Brazil’s annual cumulative inflation rate is anticipated to be within the range of 5.5% to 5.6%, dropping to around 5.1% by the end of the year. However, this figure is still higher than the upper limit of the inflation tolerance range set by the country’s estimates.

The latest data from the National Bureau of Statistics shows that from January to February, the operating income of industrial enterprises above designated size nationwide increased by 2.8% year-on-year, with the growth rate accelerating by 0.7 percentage points compared to the previous year. The profits of industrial enterprises have improved, with the manufacturing sector showing significant profit growth, increasing by 4.8% year-on-year from January to February.

Plastic market morning session dynamics.

Oil prices fell initially but then rose, closing with a long lower shadow; the domestic plastic futures main contract showed an upward trend in overnight trading:

The plastic 2505 contract is quoted at 7,713 yuan per ton, up 0.14% from the previous trading day.

The PP2505 contract is quoted at 7,351 yuan per ton, up 0.08% from the previous trading day.

The PVC2505 contract is quoted at 5132 yuan/ton, an increase of 0.16% compared to the previous trading day.

Four, today's market prediction

PE：On the supply side, next week, PE facilities at Wanhua Chemical and Yanshan Petrochemical are scheduled to restart, while PE facilities at Zhong'an United and Shanghai Petrochemical are planned for short-term maintenance. It is expected that the maintenance losses will decrease somewhat, and supply in the mainland will remain ample, while port arrivals continue to be low. On the demand side, it is anticipated that the overall operating rate of downstream industries for PE will continue to rise slightly next week, with demand following suit modestly. There will be sporadic replenishments of stretch film and food and daily chemical packaging bags, and orders for film production are relatively decent during the peak season, but agricultural film companies are cautious and mainly purchase raw materials on a per-order basis. Considering the combined effects, it is expected that the polypropylene market may consolidate within a range.

PP：On the supply side, a small number of PP plants are scheduled for maintenance next week, while some previously shut down PP plants are planning to restart. The resumption of production capacity may exceed the newly added maintenance capacity, and the utilization rate of PP plant capacity is expected to increase slightly, with little overall change in supply. On the demand side, terminal demand is expected to continue to be released slowly next week, mainly driven by rigid demand purchases. Affected by the weak global economy and overseas tariffs, some downstream export orders have been reduced. Squeezed by the reduction in both domestic and foreign orders, the willingness of downstream raw material procurement and restocking is low. However, due to the upcoming Qingming holiday next week, there may be expectations for downstream stockpiling. Under the comprehensive influence, it is expected that the polypropylene market may rise with fluctuations.

PVC：On Thursday, the overall cultural goods index continued to rise, and the commodity trends also showed divergence. By the midday close, the main domestic futures contracts were mixed. In the PVC sector, no significant price variables were observed. Regarding supply maintenance, although a few companies are undergoing maintenance, the resulting loss in volume is insufficient to impact price changes. With caustic soda profits remaining favorable, chlor-alkali companies continue to maintain high operational loads. The boost in demand on prices is also limited. However, as April approaches, futures are gradually entering the process of position shifting and month switching. Internationally, crude oil prices have climbed due to inventory data showing a decline in U.S. crude and fuel stocks last week. Additionally, the U.S. threat to impose tariffs on countries purchasing Venezuelan crude has heightened market concerns about tightening global supply. Overall, the PVC spot market is expected to maintain a sideways trend in the short term.