The entire energy and chemical sector showed remarkable strength on Thursday, with crude oil once again serving as the market's central driver. The main SC crude oil contract surged as much as 9% during intraday trading, exhibiting significantly greater volatility than international benchmarks WTI and Brent as intraday trading competition intensified. Additionally, pure benzene and styrene both hit their daily price limits during the session.

The rally stems from two key factors: rising oil prices are transmitting cost pressures downstream to chemical products, while several chemical products are currently facing low spot inventory levels, creating a tight fundamental picture for the near-month October contracts. The short-term market direction remains dominated by geopolitical sentiment, with crude oil maintaining a firm yet volatile trajectory, though investors should remain alert to the risk of rapid reversals should geopolitical conditions shift suddenly.

Where the market stands now

Geopolitical tensions continue to deteriorate significantly. Following Iran's recent attacks on US naval vessels, American forces destroyed five Iranian oil tankers in response. On the 9th, Iran's Islamic Revolutionary Guard Corps announced strikes on a US military base in Jordan as retaliation for the American attack on Iranian tankers. That same day, Iranian forces also targeted two US warships, eight oil tankers, and ten vessels they deemed to be violating regulations, reportedly inflicting "massive damage."

A spokesperson for the Islamic Revolutionary Guard Corps declared that Iran would establish new maritime "sanction zones" extending from Chabahar Port through parts of the Gulf of Oman and the Arabian Sea, with specific coordinates to be announced separately. Furthermore, IRGC spokesperson Mohebbi stated that no advanced technology could penetrate Iran's multi-layered surveillance system in the Strait of Hormuz. Market rumors suggest the Revolutionary Guard has proposed a series of conditions to end the conflict, though all remain unacceptable to the United States, indicating that confrontation and stalemate between the two sides will persist.

Supply concerns intensify

The EIA's Short-Term Energy Outlook report indicates that global oil inventories have declined by approximately 400 million barrels so far this year, with further decreases expected through year-end as substantial volumes of Middle Eastern production and exports remain disrupted. In the spot market, Dubai crude premiums have surged dramatically, confirming the tightness of available supply. In the near term, international crude prices have decisively broken through the psychological $100 per barrel level, and the upward trajectory is expected to continue amid escalating geopolitical tensions.