US White Oil Prices Rise Ahead of Seasonal Demand Amidst High Crude Oil Costs

Prices of White Oil (Cosmetic Grade) in the US market have increased by almost 2% in the first half of September 2023, largely attributed to increments in the prices of feedstock Crude Oil, which also appreciated by almost 3% in the United States. At the beginning of September 2023, Prices of White Oil stabilized in the US market as fears of impending increments in the interest rates loomed amongst the local populace, which largely forecasted a negative purchasing sentiment in the region, with activities being only restricted towards essential requirements at the beginning of September 2023. However, towards the end of September 2023, demand for White Oil (Cosmetic Grade) strengthened in the US market as White Oil found its prime application in the skincare and cosmetic industries.

Demand for White Oil has appeared to improve across the United States due to increased demand from the skincare industry as temperatures across the United States are expected to remain above average in the East Coast and Central United States, according to the Climate Prediction Center (CPC) of the National Oceanic and Atmospheric Administration (NOAA).

Key players in the cosmetic industry have stated that sales in the skincare industry remained steady across North America till August 2023, which had helped prices of White Oil to maintain stability in the US market despite prices of feedstock Crude Oil appreciating since August 2023. Furthermore, inflation rates have not been brought to the target corridor as the US Federal Reserve forecasts a hike of 25 basis points towards December 2023. According to the FRED, inflation rates in the middle of September 2023 were recorded to have increased by 0.6%.

The market situation for White Oil is expected to improve towards the last quarter of 2023 as purchasing sentiments improve, for which the demand is primarily driven by season. Prices of White Oil are expected to increase further as imports of White Oil from China are anticipated to become expensive. This is largely due to worsening weather conditions across the port of Shenzhen as super typhoon Saola draws closer to the prime cities of Hong Kong, Guangdong, and Shenzhen (where White Oil is produced). This has consequently led to the shutdown of major business and manufacturing operations, including the closure of ports, which can drastically affect the supplies to the United States and consequently lead to a shortage of inventories of White Oil across the United States.