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Exxon Mobil Corporation Message Board

  • bluecheese4u bluecheese4u Feb 2, 2013 1:54 AM Flag

    Ethanol Weakens Against Gasoline on Ample Supply, Lower Demand

    Ethanol Weakens Against Gasoline on Ample Supply, Lower Demand

    By Mario Parker - Feb 1, 2013 2:22 PM MT

    Ethanol weakened against gasoline on concern demand isn’t strong enough to cut a glut of the biofuel.

    The spread widened 1.68 cents a gallon to 58.46 cents after a Jan. 25 Energy Information Administration report showed stockpiles climbed to a six-week high even as production plunged to the lowest level since the Energy Department’s statistical arm began tracking weekly data in June 2010.

    “It’s too much ethanol chasing too little demand,” said Wallace Tyner, an agricultural economist at Purdue University in West Lafayette, Indiana. “Ethanol has decoupled from gasoline.”

    Denatured ethanol for February delivery rose 1.1 cents, or 0.5 percent, to $2.469 a gallon on the Chicago Board of Trade, the highest since Sept. 10. Prices advanced 12 percent in January, the first monthly gain since October, and are up 13 percent this year.

    Gasoline for March delivery increased 2.19 cents, or 0.7 percent, to $3.0536 a gallon on the New York Mercantile Exchange. The contract covers reformulated gasoline, which is made to be blended with ethanol.

    Based on March contracts for ethanol and gasoline the additive traded at a 57.76-cent discount to the motor fuel. The February ethanol contract expires Feb. 5.

    Ethanol-blended gasoline made up 87 percent of the total U.S. gasoline pool in the week ended Jan. 25, down from 90 percent a year earlier, Energy Information Administration data showed in a Jan. 30 report.


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