Crude and gas prices climbed, with Brent at $66.65/bbl and Henry Hub gas at $3.79/MMBtu, supported by OPEC+ supply discipline, rising LNG exports, and seasonal demand. Tighter gasoline cracks are limiting naphtha availability, pushing ethylene and propylene feedstock costs higher. U.S. rig counts declined again, reinforcing constrained ethane supply and supporting margins for integrated producers. Methane derivatives like methanol and ammonia also see floor pricing due to gas resilience.
Short-term, converters face margin pressure as feedstock costs outpace product price gains. Polyethylene and polypropylene prices are expected to remain firm through July. Over the medium term, potential oil supply increases may offer margin relief, though hurricane season and LNG risks could offset gains. By late 2025, refining oversupply may re-emerge, challenging non-integrated producers. Strategic purchasing is recommended to hedge against further cost escalations.
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