International Oil Prices Fluctuate at Low Levels, Plastic Main Contract Slightly Rises

I. Crude Oil Market Dynamics

Due to the balance between concerns over oversupply and geopolitical risks, international crude oil is fluctuating at a low level.WTI Crude OilDuring the session, it once fell more than 1%, eventually closing down 0.21% at $57.21 per barrel, but the weekly line barely recorded two consecutive gains.Brent Crude OilClosed down 0.07% at $60.73 per barrel.

Market analysis

Geopolitics is the biggest trading variable this month, with potential geopolitical events such as "Iran-Israel" and "Russia-Ukraine" serving as catalysts for crude oil prices. Geopolitics may continue to cause significant disruptions in January. If there are no substantial geopolitical changes, it is expected that crude oil prices will remain weak and volatile based on the relatively loose fundamentals.

Key points to focus on later: 1. Whether 1.0PEG+ will suspend production increase as planned in January; 2. Whether there will be new breakthroughs in agreements between Russia and Ukraine; 3. Whether the conflict between Iran and Israel will further intensify; 4. Whether Venezuela, after Maduro's resignation, will exert some control over heavy oil.

Section 2: Macroeconomic Market Trends

1. Venezuela Situation - ① The U.S. launched a "three-hour lightning strike" against Venezuela, code-named "Absolute Determination." ② The Vice President of Venezuela is acting on behalf of the President. ③ Trump threatened the acting President of Venezuela and stated that "Greenland is absolutely needed." ④ The U.S. lifted airspace restrictions in the Caribbean. ⑤ The European Union issued a statement but did not condemn the U.S. ⑥ Maduro is expected to "appear for the first time" in New York on the 5th local time.

2. Yemen Situation - ① The Yemeni government launched a military action against the Southern Transitional Council; the Southern Transitional Council stated that it will "retaliate severely" against the military action initiated by the Yemeni government. ② According to sources from the Yemeni Southern Transitional Council and local witnesses, Yemeni airports and military bases were attacked in airstrikes. ③ On the 4th, local officials from Yemen's eastern Mahra province stated,Saudi Arabia conducted an airstrike on the province that day.

3. Iran's Internal Turmoil - ① Commander of the Iranian Police Force: Targeted arrests have been made against the instigators of the unrest. ② Speaker of the Iranian Parliament:Former U.S. PresidentTrump threatens to provide aid to protesters in Iran.

Danish Prime Minister urges Trump to stop threatening to take over Greenland. Previously, the wife of a senior U.S. official hinted at taking over Greenland soon.

5、OPEC+ eight countries agree to suspend production increase in the first quarter.The meeting did not discuss the issue of Venezuela.

Paulson of the Federal Reserve: If inflation cools down, the Federal Reserve may be able to further cut interest rates.No additional interest rate cuts will be introduced immediately.

Shanghai has introduced an action plan to accelerate the creation of a world-class international business environment. The plan includes 26 tasks and measures across four areas: creating an efficient and convenient government service environment, establishing a fair and just market competition environment, developing a friendly and adaptable industrial ecosystem, and fostering a diverse and collaborative social governance environment.

Guizhou has introduced 18 measures to expand private investment, aiming for private investment growth to exceed the growth of total fixed asset investment by 2027. The proportion of private investment in fixed asset investment is targeted to reach approximately 42%.

In 2025, multiple types of commercial rockets are launched intensively, and the flourishing development of commercial space activities injects strong momentum into China's aerospace endeavors. In the inaugural year of the "15th Five-Year Plan," a new blueprint for China's aerospace is unfolding. The manned lunar landing project will conduct multiple tests, Chang'e 7 will head to the moon's south pole to search for evidence of water ice, and various new rockets will make their maiden flights and challenge recovery.

3. Plastic Market Dynamics

International oil prices fluctuate at low levels, and the main plastic contract slightly explores an increase.

The plastic 2605 contract is quoted at 6472 yuan/ton, up 0.23% compared to the previous trading day.

PP2605 contract reported at 6348 yuan/ton, up 0.67% from the previous trading day.

PVC2605 contract reported at 4805 yuan/ton, up 0.33% compared to the previous trading day.

Styrene contract 2605 reported 6,791 tons, up 0.18% compared to the previous trading day.

Section 4: Today's Market Forecast

In the short term, due to the previous overselling and inventory reduction actions alleviating the supply pressure in January, the impact of newly launched facilities is gradually differentiating. The appropriate restocking behavior by end-users and the profit margin brought by cost reduction both give confidence to the market. It is expected that today's market price may rise, with a narrow adjustment of around 30-100 yuan/ton.

PP: Macroeconomic policies play a positive supporting role, market sentiment has improved, but under the off-season of downstream consumption, demand continues to be weak, suppressing market trends, and the sentiment in the market remains cautious.

PVC: Domestic PVC production enterprises have limited scale of maintenance after the holiday, and the market supply is expected to continue to increase gradually. The demand for spot fundamentals has not improved, but there are many macro uncertainties. The atmosphere during trading may support the pressure from weak fundamentals. The spot market is expected to maintain range fluctuations, with PVC in the East China region using the calcium carbide method for type five cash delivery expected to fluctuate within the range of 4450-4550 yuan/ton.