US White Oil prices stabilize amidst uncertain supply conditions and high demand

The second half of April 2024 witnessed prices of White Oil (cosmetic grade) continuing a stable situation across the US market despite uncertainties prevailing across the supplies of feedstock Crude Oil and a high demand from the downstream cosmetic industries due to current seasonal factors.

In terms of demand, demand for White Oil was recorded to have been strong as major parts of the Eastern United States continue to experience higher than-above temperatures, thereby bolstering the demand from the downstream cosmetic industries, as forecasted by CPC (Climate Prediction Center). The demand for White Oil is expected to further strengthen as NOAA (National Oceanic and Atmospheric Administration) further predicts abnormal precipitation patterns attributed to the natural phenomenon of El Nino and La Nina.  Moreover, major cosmetic players across the US have reported strong sales and revenues in the first quarter of 2024, with overall sales surging by approximately 8% in the first quarter of 2025 and revenues being up by approximately 6%, clearly indicating a demand for White Oil (cosmetic grade).

In terms of feedstock, with global Crude Oil prices hitting a 6-month high, traders looked for any indications of a direct conflict between Israel and Iran that may further restrict supplies of Crude Oil, and potentially lead to uncertainties in the prices of White Oil. The abrupt increase in the price of crude oil has stoked new worries among investors, lawmakers, and central bankers throughout the world about the possibility of inflationary pressures. According to EIA, the week ending April 12, 2024, had an average of 15.9 million barrels of crude oil refinery inputs, a 131 thousand barrels per day increase over the previous week. Refineries operated at 88.1% of their operable capacity last week. U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 2.7 million barrels from the previous week. At 460.0 million barrels, U.S. crude oil inventories are about 1% below the five-year average for this time of year. Hence with refinery run rates increasing due to the high demand for gasoline, this is expected to directly translate into the production costs of White Oil.

However, supply conditions for White Oil (cosmetic grade) were recorded to have eased as weather conditions improved in the Panama Canal due to seasonal rains across South America. As per the statement passed by the Panama Canal Authority on April 2024, the number of transits per day would be gradually allowed up to 32 from 27 and the same was informed to the clients, thereby easing supply conditions of White Oil.

Therefore, amidst high demand conditions, and uncertainties in supplies of feedstock Crude Oil, prices of White Oil across the US market are expected to increase.