How does adding palm oil prevent peanut butter from separating?

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How does adding palm oil prevent peanut butter from separating?

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In pure peanut butter, made only from crushed peanuts, the liquid peanut oil floats to the top and (partially) separates from the peanut solids. This is possible because the oil is liquid, so it can flow.

Palm oil is (semi)solid at room temperature. A mixture of palm oil and peanut oil is semisolid at room temperature as well. So instead of a mixture of liquid oil and peanut solids, you get one coherent mass of (semi)solid material.

It’s the same reason why compound butter doesn’t separate into fat and herbs if you let it sit. But if you heat it so the butterfat melts, then the two will separate.