I. Crude Oil at $100: Geopolitical Deadlock vs. Inflation Pressures
On May 14, WTI June futures settled at $101.17/barrel, up $0.15; Brent July futures settled at $105.72/barrel, up $0.09. Beneath the calm surface, the supply disruption reality and demand suppression expectations are fiercely contesting at the $100 threshold.
Key Data
| Indicator | Value | Change |
|---|---|---|
| WTI June | $101.17/bbl | +$0.15 |
| Brent July | $105.72/bbl | +$0.09 |
| US PPI YoY | +6% | Highest since 2022 |
| US PPI MoM | +1.4% | Energy costs +7.8% |
Supply-Demand Logic
- Supply — Deficit expectations strengthening: Hormuz Strait blockade continues, tanker traffic down over 90%, 3-4 million tons of fertilizer trade disrupted monthly. OPEC April production fell 1.7 million bbl/day, Iranian output down 30% since February. IEA dramatically revised from surplus to deficit. Middle East spot premiums hit a one-week high.
- Demand — Inflation suppressing outlook: US April PPI surged 6% YoY and 1.4% MoM, both highest since 2022, energy costs up 7.8% in a single month. Rate cut expectations delayed to September or later.
- Geopolitical variable: Trump arrived in Beijing on May 13 for US-China trade talks. Progress could improve risk appetite, but the US-Iran deadlock remains the core pricing driver.
II. Impact on Plastics Supply Chain
Crude oil is the fundamental feedstock for PE, PP, PVC. While cost-side support provides a floor, Sci99 data shows 80 out of 109 chemicals declined (73.39%). China MIIT energy conservation inspection covers PVC, ethylene — potential supply contraction offers some support, but downstream purchasing remains sluggish.
III. Outlook
Short-term oil prices will oscillate in the $100-108 range. Geopolitical supply deficit provides hard support below; inflation and delayed rate cuts cap upside. If Hormuz blockade continues, WTI unlikely to break below $98; if US-China talks yield positive outcomes, Brent could test $110.
For plastic feedstocks, cost floor + energy inspection supply contraction limits PVC downside, but weak seasonal demand caps rebound. Maintain low inventory strategy and monitor geopolitical pulse effects.
