EIA increases forecasts for 2020, 2021 ethanol production

Source: By Ethanol Producer Magazine • Posted: Wednesday, July 8, 2020

The U.S. Energy Information Administration increased its forecasts for 2020 and 2021 ethanol production in its latest Short-Term Energy Outlook, which was released July 7. Forecasts for ethanol consumption were also revised up.

The EIA currently predicts ethanol production will average approximately 900,000 barrels per day in 2020, up from the 850,000-barrel-per-day prediction made in the agency’s June STEO. The EIA has also increased its forecast for 2021 ethanol production to an average of 1 million barrels per day, up from its June prediction of 860,000 barrels per day. Production averaged approximately 1.03 million barrels per day in 2019.

On a quarterly basis, the EIA currently expects ethanol production to average 920,000 barrels per day in the third quarter of 2020, increasing to 960,000 barrels per day during the fourth quarter of the year. Data released by the agency shows ethanol production averaged 1.02 million barrels per day during the first quarter of this year, but fell to 710,000 barrels per day during the second quarter. Moving into 2021, the EIA predicts ethanol production to average 980,000 barrels per day during the first quarter, 1 million barrels per day during the second quarter, 1.01 million barrels per day during the third quarter and 1.02 million barrels per day during the fourth quarter.

The EIA currently expects the U.S. to blend 836,000 barrels per day of ethanol this year, up from the June prediction of approximately 800,000 barrels per day. The agency also increased its prediction for 2021 blending to 919,000 barrels per day, up from approximately 880,000 barrels per day predicted in June. Ethanol blending averaged 948,000 barrels per day in 2019. This level of consumption would result in the ethanol share of total gasoline averaging 10.1 percent in 2020 and 2021, compared to 10.2 percent in 2019 and 10.1 percent in 2018. The EIA said this stable ethanol share assumes that growth in higher-level ethanol blends is limited by a combination of lower gasoline prices reducing incentives for increased ethanol blending and limited consumer demand for ethanol blends beyond E10.

The EIA’s most recent weekly ethanol data shows production reached 900,000 barrels per day the week ending, June 26, up from 893,000 barrels per day the previous week. Ethanol stocks fell to 20.164 million barrels the week ending June 26, down from 21.034 million barrels the previous week.

The agency’s most recent monthly data shows the U.S. imported 255,000 barrels of ethanol in March, all from Brazil. The U.S. exported 2.457 million barrels of ethanol in April, primarily to Brazil, India, and Mexico.

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