Dry skin means lack of water, not lack of oil. In the late 1940's, a doctor at Massachusetts General Hospital took a hard callus off the foot of one of his patients and placed in oil. It remained as hard as ever. Then he placed the callus in water and it became very soft, but soon after being removed from the water, it became very hard again. Then he left the callus in water until it became soft, removed it and then soaked it in oil and it remained soft for a long time. He had shown that dry skin should be treated by using oils and creams to seal in moisture. Cosmetic manufacturers soon produced oil-in-water emulsions which were incorporated into creams designed to seal in water. All lotions and creams work the same way, no matter how much they cost or what special ingredients they claim to contain.
However, some studies show that oil-in-water emulsions soak off the outer layer of skin and increase its susceptibility to irritation from cold, rubbing, and externally applied chemicals. The longer skin is immersed in water, the more protective outer coatings of skin is stripped off.
A study from Denmark shows that daily use of some skin creams can make the skin even more sensitive to irritants such as soaps and alcohol. The researchers asked people to apply either a high or low-fat moisturizing cream on the upper arm, three times a day, for five days, while the other upper arm served as a control. The day after moisturizer treatment was stopped, the researchers applied an irritant called sodium lauryl sulphate to the creamed arm. The high-fat creamed arm had far more redness and irritation, while the low-fat creamed arm had no irritation. This shows that some high-fat moisturizing creams can strip away the protective outer layer of skin called the epidermis and cause skin rashes. If your moisturizing cream appears to irritate your skin, you may benefit by substituting a low-fat cream that does not leave a greasy layer when you rub it on.