The global White Oil market faced a bearish trend as demand remained subdued in both Asian and North American markets, especially from the downstream lubricant industries. A 2% drop in Crude Oil prices in mid-November 2024 eased production costs of White Oil. However, supply conditions varied, with tight supplies in Asia, particularly China, and ample supplies in the US market.

In the US, White Oil (cosmetic grade) supplies remained plentiful, as domestic refinery run rates in November 2024 were 90.65%, up from 88.25% in October 2024, data from EIA showed. This, coupled with a drop in Crude Oil prices, helped reduce the cost of White Oil in the US. Retail sales rose 0.4% in September 2024to $714.4 billion from August, and 1.7% year-over-year, with health and personal care stores seeing a 1.1% month-over-month increase, according to the data released by US Department of Commerce, with October data still pending at the time of writing. However, a 6% slump in demand occurred at the end of the financial year, prompting suppliers to liquidate inventories.

In Southeast Asia, White Oil supply remained tight, particularly in China. Refinery throughput in China fell 4.6% year-over-year in October 2024, continuing a seven-month decline due to plant closures and reduced holiday travel demand. Chinese refiners processed 59.54 million tonnes of crude oil in October, down from 14.3 million barrels per day (MMbpd) in September. Despite Yulong Petrochemical increasing operations at its new 200,000-bpd unit, throughput continued to decline due to refinery closures.

However, a 6% drop in White Oil prices in China during the end of November 2024 was driven by weak demand from the lubricant industry and sluggish White Oil consumption. The need to clear inventories before year-end tax deadlines also impacted on White Oil orders, as buyers preferred term volumes over spot purchases. In China, demand for lubricants declined, particularly in the automotive sector, resulting in reduced White Oil consumption. Industrial output growth slowed the previous month, and problems in the property sector showed little improvement, leading to concerns among investors about the economic and industrial stability of the world’s largest crude importer in Asia.

Despite tight supply in Asia, global White Oil prices are expected to decrease due to end-of-year destocking activities, which should result in more abundant supply across markets. A 3% drop in freight charges and delayed arrivals are expected to lower import prices at Southeast Asian ports and the US East Coast, contributing to the decline in White Oil prices.