White Oil edges higher in USA on bullish demand and waned supplies
- 06-Jan-2022 3:00 PM
- Journalist: Nicholas Seifield
In the USA, white oil prices are rising at a stable level owing to product shortage in the domestic market as demand outpaces the supply. Market dynamics of white oil appeared to be optimistic as demand from downstream industries including Pharmaceuticals, Cosmetics, Food industry etc. has been remained bullish.
Last year, Closures and the suspension of activities at various refineries or crude distillation units impacted the overall production levels of White oil in the region. For instance, Exxon Mobil refinery 8 months-long lockout at Beaumont, Texas due to contract disputes and closure of Phillips 66 oil refinery at Louisiana in November because of extensive damage during Ida hurricane along with shut down of TotalEnergies SE gasoline producing FCC and small crude oil unit having capacity of 225,500 BPD in Texas in December squeezed the overall supplies of refinery derivatives.
Extreme volatility in the crude oil values has also contributed to the inflation in white oil fundamentals. Oil prices witnessed a hike of around 1.5% - 2% in the first week of January depending upon the Omicron variant's fading fears that are likely to have a slight impact on demand. Crude oil prices traded higher after the monthly OPEC+ meeting as it agreed to stick to the previous plans of increasing oil output to around four lakh barrels per day in February.
White Oil is an odorless and colorless liquid obtained from distillate of petroleum. It is available in different grades including 50/60, 65/75, 80/90, 200/215, and 340/365 depending upon its viscosity. White Oil is finds application in industries such as Cosmetics, Pharmaceuticals, Food, and Industrial Solutions. It is also extensively used as an insecticide spray to control pests such as aphids, mites, caterpillars, mealybugs, scale, citrus leaf miners, etc.
According to ChemAnalyst white Oil prices are expected to ease later in February after the increment in the Oil production as per the OPEC+ meeting. However, the demand and supply dynamics would directly influence white oil futures.