Crude Oil Futures Drop 13% as U.S. PE Producers Still Seek November Increases

Weekly cards

1. Crude oil and feedstocks: a sharp week-on-week drop

Futures rows compare the same contract month at both dates. The contract month is not the observation date or a forecast of spot. Some reports cite a 16–17% Brent drop by comparing the expired December contract with January; that mixes contracts and is not used here. EIA had not released spot data after November 3 at the cutoff. Monthly rows are NETSPIRES arithmetic means of EIA daily observations; November is month-to-date through Nov 3 only, not a full-month average.

What this shows: Both crude benchmarks lost about 13% between Friday settlements on the same contract months. Physical spot prices published by EIA point the same way through November 3, the last day EIA had released. Brent spot fell much further than WTI spot over Oct 27–Nov 3. [1, 2, 8, 9]

What this shows: The decline came in two steps. On November 2, WTI fell USD 7.66 as Qatari-mediated U.S.–Iran talks were reported. On November 4, after the U.S. midterm results, Brent traded 8.9% lower intraday. Tanker attacks in the Gulf on November 5 produced only a partial rebound. OPEC+ had decided on November 1 to hold December output at September levels, so supply policy did not drive the move. [2, 3, 4, 5]

No current-week Mont Belvieu ethane or U.S. Gulf ethylene price was verified. Propane is a cracker and PDH feedstock, not a resin price.

What this shows: Feedstocks followed crude down. Lower naphtha mainly reduces costs for Asian and European crackers, which run largely on naphtha. U.S. crackers rely mostly on ethane and propane. Propane fell 7.0% into November 3, but no current-week ethane or ethylene price could be verified, so the cost change for U.S. PE producers cannot be quantified from this week's data. [6, 7, 26] Crackers can use ethane, propane or naphtha, and the feedstock choice changes the co-product mix, so a crude move does not translate into PE and PP prices by the same amount or on the same timetable. [32]

2. U.S. polyethylene: increases proposed, none confirmed

These are producer proposals and company statements, not published market settlements.

What this shows: Producers are asking for more even as feedstock costs fall. The sequence is September +5 cents/lb (as reported by Dow), an October initiative still unsettled in early November, and November nominations of 5–7 cents/lb. The S&P Global report quoted one trader expecting November to end up 'a couple of cents or flat'. Formosa's force majeure on select grades is the only verified U.S. supply disruption this week. Its duration and affected volume were not disclosed, so the whole Point Comfort complex should not be treated as offline. [10, 11, 12, 13, 19] Westlake's November 4 results release described PE and PVC prices as stabilizing or improving entering the fourth quarter. [31]

3. U.S. polypropylene and propylene

No October or November PGP settlement was found before the cutoff.

What this shows: U.S. PP contract prices were 17 cents/lb below May after the September propylene settlement fell 2 cents/lb, while PE rose 5 cents/lb in September according to Dow. No October or November PGP settlement was found before the cutoff. Falling propane removes one source of upward cost pressure, but propane is not propylene, so the size of any November PP move cannot be inferred from it. Plastics Technology's October forecast of flat to slightly lower PP is an attributed outlook, not an observed price. [7, 14, 15]

4. China and Southeast Asia: futures reversal and weaker offers

Chinese and Southeast Asian figures are regional signals; they are not U.S. prices and are not converted.

What this shows: Chinese polyolefin futures reversed within the week. PP hit a record intraday high on November 2, then the PE and PP main contracts were limit-down on November 5 and fell further on November 6. Import offers into Southeast Asia softened at the same time, and buyers resisted homo-PP above USD 1,600/ton CIF. Hana Securities' Korean weekly showed mixed directions: HDPE firmer, LDPE and LLDPE lower, PP flat. No same-contract prior-week Dalian close was verified, so the table shows levels and daily moves only. [16, 17, 18, 19, 20, 21, 29, 30]

5. Europe: monomer contracts up, polymer increases resisted

Monomer contracts are not polymer prices.

What this shows: European converters faced higher November monomer contracts while polymer producers struggled to pass on October increases. The November monomer settlements were set before most of this week's oil drop, so they reflect late-October costs. [22, 23, 27]

6. Engineering resins and additives

List-price announcements, not realized prices.

7. Freight

Composite indices, not quotes for a specific route or shipment.

What this shows: Container freight eased slightly on both composite measures, by 1.46% on SCFI and 1% on Drewry's index. The change is small next to the 13% fall in crude. Because these are composites with different methods and routes, they do not give the freight cost for a particular import. [33, 34]

8. Upcoming market data

NETSPIRES reading (interpretation, not observed data). The verified facts point in two directions. Upstream costs fell sharply this week, which weakens the cost case for the November PE nominations. The Formosa outage and producers' continued nominations work the other way. For PP, the falling-price trend since May has not been interrupted by any verified increase. [1, 2, 7, 10, 13, 14]