Morning Briefing - 18 May. 2026
CommoPlast
Morning Briefing
18 May 2026
Brent: $109.26 (+ $3.54)
WTI: $105.42 (+ $4.25)
Naphtha CFR Japan: á
Ethylene CFR NEA: Stable
Ethylene CFR SEA: Stable
Propylene CFR China: Stable
*Data represent closing prices of the previous trading day
……………………………………………………………….
Oil market calm masks deepening structural strain
The oil market is showing signs of dangerous complacency as emergency demand destruction, stockpile releases, and surging Atlantic Basin exports temporarily cushion the impact of the Hormuz disruption. China’s sharp retreat from spot buying has played a central role in easing physical tightness, allowing crude prices to pull back from crisis highs despite the massive loss of Middle Eastern supply. Analysts argue the market is mistaking delayed replacement cargo arrivals and weak Asian refinery demand for genuine stability, leaving the current balance increasingly fragile.
The deeper concern is that global inventories continue to drain while the system grows more dependent on long-haul US crude flows to sustain Asia. That adjustment becomes harder to maintain as summer fuel demand accelerates and pressure builds on US domestic fuel markets. China’s willingness to suppress imports and draw down reserves has bought the market time, but it has not resolved the structural supply deficit created by the prolonged Hormuz closure. The market now appears to be moving into a more dangerous phase defined by tightening supply, thinning buffers, and steadily rising replacement costs.
________________________________________________________
China PP and PE chart diverging paths amid sluggish demand
Last week, weaker futures and sluggish downstream demand kept buyers firmly defensive, with PE facing heavier pressure than PP. While PP found some support from expectations of tighter domestic supply following reported production cut developments, PE remained weighed down by persistently weak consumption fundamentals and limited downstream appetite.
The gap between the two products has widened noticeably in recent weeks, reflecting how much more PE demand has deteriorated compared with PP. Most converters continued purchasing only for immediate needs, while softer futures and growing inventories discouraged fresh positions ahead of the weekend.
________________________________________________________
Follow us on CommoPlast Official Telegram Channel for more: https://t.me/commoplast
Your empowering market insight site.