Although crude oil is a source of raw materials for making plastics, it is not the major source for plastics manufacturing in the United States. Modifications to natural gas account for more plastics production domestically. That said, a prevailing thought within the plastics world ties resin and crude oil prices to the volatility of crude oil prices. The link below charts LDPE resin price per pound (x100) against the price for a barrel of crude oil from Feb 2013 through Feb 2017. LDPE resin cost was based on Chem Data Index data and the crude oil prices were found at ycharts.com.

Link:  oil-ldpe

Generally speaking, when crude moves, LDPE resin prices are soon to follow. While they may not be directly related nor necessarily causal, the prevailing thought of poly resins moving in a similar fashion to crude oil pricing seems to be supported by the data the last 4 years.

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Written by Trent Romer