To The Moon

5.1 Crude

Synthesis

The global crude oil market is currently navigating a period of intense crosscurrents, characterized by substantial macroeconomic policy shifts, escalating geopolitical interventions, and surprising domestic inventory builds that are capping outright price momentum. West Texas Intermediate futures edged lower to settle near the $66 per barrel mark, while Brent hovered just below $72 per barrel, as traders digested the implementation of the new US global tariff regime, which officially came into effect at a 10% rate. The market is also heavily scrutinizing the massive 11.4 million barrel surge in United States crude oil inventories reported by the American Petroleum Institute, an unexpected build that vastly exceeded the anticipated 1.85 million barrel increase. Concurrently, the geopolitical landscape remains exceptionally fraught. The United Kingdom government announced aggressive new sanctions against the Russian oil pipeline operator Transneft, an entity responsible for over 80% of Russia's crude exports, effectively targeting Moscow's energy revenue and its so-called "shadow fleet" of tankers. As a direct consequence of these widening sanctions and lingering fears of a United States and Iran military confrontation, the cost of shipping crude has skyrocketed. Chartering a Very Large Crude Carrier to transport crude from the Middle East to China has more than tripled since the start of the year, reaching upwards of $170,000 per day—the highest freight rate seen since April 2020. In Eastern Europe, supply security concerns prompted the Hungarian government to authorize the release of 250,000 barrels of crude oil from its strategic reserves to prioritize the MOL refinery, following a halt in oil deliveries through the critical Druzhba pipeline.

Goldman Sachs maintains a nuanced but ultimately supportive structural outlook on global crude markets, raising its 2026 price forecast to a bottom of $60 per barrel for Brent by the fourth quarter. The bank highlights a critical "stuck at sea" phenomenon, noting that while a global production surplus exists on paper, it has failed to depress benchmark prices because roughly 375 million barrels of sanctioned crude from Russia, Iran, and Venezuela remain trapped in floating storage. This massive volume of stranded oil accounts for a third of the year-over-year visible inventory builds, artificially keeping OECD commercial stocks tight. Furthermore, Goldman Sachs explicitly factors in a persistent $6 per barrel geopolitical risk premium, arguing that despite the surplus, ongoing Middle East tensions will prevent prices from plunging. In the broader macroeconomic context, the bank observes a significant capital rotation away from capital-light software and artificial intelligence sectors into what it terms "HALO" businesses—Heavy Assets, Low Obsolescence—which include pipelines, energy infrastructure, and tangible commodities, providing further systemic support for crude oil valuations.

5.3 Naphtha

Synthesis

The global naphtha market remains heavily pressured by weakening downstream petrochemical margins and unexpected technical outages across critical Asian consumption hubs. The Japanese petrochemical sector has experienced a significant disruption as Asahi Kasei Mitsubishi Chemical Ethylene Corporation was forced to shut down its massive 567,000 metric ton per year naphtha cracker at the Mizushima plant due to unresolved technical issues. This abrupt closure, with no fixed restart date, has immediately removed a substantial pillar of demand from the Northeast Asian physical market, compounding the existing structural weakness in ethylene cracking margins. In response to the broader crude oil rally, open-spec naphtha benchmark prices in Japan still managed to inch higher, trading in the range of $611.25 to $616.75 per metric ton, representing a modest increase of $1.25 per metric ton. However, this nominal price support is entirely derived from upstream crude strength rather than organic physical demand. The first-half April open-spec naphtha assessments on a Cost and Freight Japan basis were pegged at a relatively weak premium of $7.70 per metric ton. Furthermore, regional trade flows highlight a growing overhang; Singapore's imports of naphtha, reformates, and other blendstocks surged dramatically, rising 127.77% week-over-week. This massive influx into Southeast Asian storage tanks indicates that sellers are struggling to place cargoes directly into the hands of end-users, increasingly relying on regional trading hubs to absorb the surplus. Overall, the naphtha market is trapped between the rock of rising crude-driven feedstock costs and the hard place of collapsing downstream operating rates and unplanned cracker outages.

5.5 LPG/NGLs

Synthesis

The global Liquefied Petroleum Gas and Natural Gas Liquids complex is demonstrating significant temporal divergence, with prompt markets facing downward pressure while forward months reflect underlying optimism. In the Asian refrigerated market, CFR India prices for evenly split propane and butane cargoes slated for March delivery advanced by $6 per metric ton to a range of $593 to $603 per metric ton. This uptick was largely driven by an upward revision of the projected March Saudi Contract Price forecast. However, relative to the actual March CP, physical premiums remained completely flat at $55 per metric ton, indicating that the outright price gain was entirely paper-driven rather than a reflection of localized physical tightness. Similarly, for deliveries to South China, second-half March propane and butane prices rose by $6 per metric ton to $640-$650 and $635-$645 respectively, maintaining steady premiums of $100 to $110 over the CP. Conversely, the United States Gulf Coast spot market exhibited clear weakness. Prompt polymer-grade propylene prices dropped by 0.75 cents per pound as bids and offers converged lower, pushing prices back below the 34 cents per pound threshold amid a distinct lack of trading activity. Furthermore, FOB US Gulf Coast propane prices for March loading lost $2 per metric ton to settle at $394-$399 per metric ton. Interestingly, this prompt weakness was entirely offset by strength in the forward month; prices for April loading climbed by $6 per metric ton to $389-$395 per metric ton, and the premium for April loading increased to 9.50-10.50 cents per gallon over Mont Belvieu, pulled higher by prevailing market perceptions of a seasonal increase in petrochemical demand.

5.7 Gasoline/Mogas

Synthesis

The global gasoline and octane blending markets are exhibiting pronounced strength, propelled upward by a combination of surging upstream crude costs and strategic regional procurement. In the physical spot market, Mexican state oil company Pemex was actively observed securing cargoes of 92 RON gasoline on an FOB Singapore basis, highlighting the structural necessity of Latin American buyers to tap into the Asian supply pool to meet domestic shortfalls. The differential for MR-size cargoes of 92 RON on an FOB South Korea basis traded at a persistent discount of $3.00 to $3.20 per barrel against Singapore quotations, while Chinese FOB cargoes traded at a narrower discount of $1.60 per barrel, reflecting the varying logistical premiums across the region. Concurrently, the Asian MTBE market surged aggressively, with FOB Singapore assessments jumping by $10.27 per metric ton to reach $688.54 per metric ton. This massive daily gain tracked the unyielding strength in related gasoline values and the broader geopolitical rally in crude oil, proving that demand for high-octane blendstocks remains robust. In the United States, the aromatics complex mirrored this volatility. US Gulf Coast benzene spot prices varied considerably as the market rolled its prompt focus to the March contract; despite the transition, March benzene was assessed up 1 cent per gallon at 307 cents per gallon for both FOB and DDP. Additionally, US Gulf Coast spot MTBE prices rose notably by 3.42 cents to reach 202.61 cents per gallon, with the differential to forward-month April RBOB climbing to minus 20.45 cents per gallon. This broad-based strength across various blending components underscores refiners' commitment to maximizing the octane value of their gasoline pools in anticipation of the upcoming summer driving season.

5.8 Petrochemicals

Synthesis

The Asian petrochemical sector is currently paralyzed by a severe disconnect between rising feedstock costs and stagnant downstream consumer demand, leading to widespread operational adjustments and a "wait-and-see" market paralysis. In the olefins chain, the market received a major shock as Asahi Kasei Mitsubishi Chemical Ethylene Corporation (AMEC) shut down its massive 567,000 metric ton per year naphtha cracker at the Mizushima plant due to technical issues, with no restart date provided. This outage theoretically tightens the supply matrix, yet the reaction in derivative markets was muted. CFR Northeast Asia butadiene prices remained entirely flat at $1,280-$1,330 per metric ton, and propylene assessments were similarly unchanged at $830-$840 per metric ton. Trade liquidity was essentially nonexistent as Chinese market participants returned from the Lunar New Year holidays only to step back and assess the poor fundamental landscape. However, ethylene prices did experience a localized surge, jumping $25 per metric ton to $700-$720 per metric ton on a CFR Northeast Asia basis, driven entirely by perceptions of tight supply following the AMEC shutdown. In the polymers segment, the market remained thoroughly depressed. Polyolefin prices on a CFR China basis were stable on zero volume, while domestic Chinese Low-Density Polyethylene (LDPE) film prices actively softened by Yuan 75 per metric ton, breaking down to Yuan 8,600-8,700 per metric ton. This softening in finished plastics proves that converters are entirely unable to absorb the higher costs of raw materials. Consequently, the industry is witnessing a scenario where forced plant outages are the only mechanism providing nominal price support to the fundamental building blocks, while the actual end-user market continues to deteriorate.

5.9 Macro/Macro Economics

Synthesis

The global macroeconomic environment is currently defined by extreme volatility, driven by a violent collision between high equity valuations, disruptive technological narratives, and aggressive new trade policies. The pervasive optimism surrounding Artificial Intelligence—once expected to lift all economic boats—has rapidly inverted into a source of widespread panic. The market is facing a triple-threat of bearish AI narratives: software companies fear imminent disruption, the "Magnificent 7" tech giants are experiencing severe capital expenditure fatigue, and semiconductor stocks are reeling from expectations of an AI spending slowdown driven by Chinese competition. Consequently, the Goldman Sachs "software at risk" basket plummeted 6% in a single day, extending its year-to-date collapse to 33%. Blue-chip stalwarts are not immune; IBM suffered a catastrophic 13% single-day drawdown—its third-largest this century—after competitors announced AI models capable of replacing legacy coding jobs. This systemic shock is flattening yield curves globally, with the US 2s/10s spread collapsing to 58 basis points and the Japanese 2s/30s plunging to just over 2 basis points, as investors suddenly view AI as a massive deflationary force. Compounding this equity fragility is the implementation of President Trump's new global tariffs at a 10% rate, sparking intense geopolitical friction, including China restricting critical rare earth exports to Japan for the first time since 2010. Amidst this chaos, Federal Reserve officials, including Governor Waller, are expressing profound concern over a "weak labor market" running concurrently with high GDP growth, warning that significant corporate job cuts are looming due to AI implementation. Furthermore, Japanese inflation cooled to 1.5% in January, the slowest pace in two years, prompting Prime Minister Takaichi to express deep reservations about further Bank of Japan rate hikes, triggering a sharp 1% weakening of the Yen. The institutional response is clear: hedge funds are dumping global stocks at the fastest pace since April, while real estate markets remain paralyzed, highlighting a macro landscape fraught with unprecedented systemic risks.