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Mounting Upstream Crude Oil Prices Accelerate the Pricing Dynamics of White Oil
Mounting Upstream Crude Oil Prices Accelerate the Pricing Dynamics of White Oil

Mounting Upstream Crude Oil Prices Accelerate the Pricing Dynamics of White Oil

  • 14-Dec-2022 2:55 PM
  • Journalist: Robert Hume

The prices of White Oil have been consistently rising since the first week of December 2022 globally. The highly refined mineral oil is made from the feedstock Crude Oil and is primarily used in the personal care sector. The expanding demand from the end-of-use industries and burgeoning energy costs have reinforced the market fundamentals of White Oil across international markets.

The ChemAnalyst database has shown that the White Oil prices demonstrated an increment of USD 35 per tonne last week in China. The COVID-19 regulations have slowed down transportation and logistics across the nation. Furthermore, as per the observed market scenario, most downstream terminal orders were fewer, and the increased quotations were subject to negotiations; thus, some factories have been considering reducing their load or ceasing operations.

According to U.S. Energy Information Administration (EIA), crude oil stocks on the Gulf Coast were at their lowest in more than eight months the previous week, at about 226.5 million barrels, resulting in limited supplies for downstream White Oil. Moreover, OPEC's falling crude production has led to an increment in WTI Crude Oil prices, strengthening the pricing dynamics of White Oil in the domestic market. On the demand side, procurement from the personal care industries has remained on the upper edge. The prices of White Oil were hovering around USD 2370-2380 per tonne last week in the domestic market of the USA.

As per ChemAnalyst, the pricing dynamics of White Oil will remain buoyant as the overall sales from the personal care sector are anticipated to accelerate amid the winter season. Moreover, following a 14,000-barrel spill into a Kansas creek, T.C. Energy Corp.'s Keystone pipeline was shut down, and traders are now doubting whether there will be enough oil in storage in crucial areas if the channel is closed for several weeks, seeding the supply challenges for White Oil. In addition, COVID-related restrictions have been loosening in China, and upstream crude oil demand is anticipated to increase.

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