EIA says US ethanol production falls to lowest level since mid-June

Source: By S&P Global • Posted: Thursday, October 1, 2020

Houston — US ethanol production averaged 881,000 b/d for the week ended Sept. 25, a decrease of 25,000 b/d on the week and down 77,000 b/d year on year, data from the Energy Information Administration showed Sept. 23.

Production fell to the lowest level since the week ended June 12 and was below market expectations. Seasonal maintenance at ethanol plants around the country has started, with most plants going offline for about five days to finish routine maintenance.

US ethanol stocks decreased by 306,000 barrels to 19.691 million barrels. The draw also exceeded market expectations.

East Coast stocks fell by 306,000 barrels to end the week with 6.129 million barrels. The Midwest region shed 183,000 barrels to finish with 6.199 million barrels. The Midwest is home to most of the ethanol plants in the US and is a significant trading hub.

Gulf Coast stocks rose by 187,000 barrels to end the week at 3.767 million barrels. The Gulf Coast is the origin for most exports from the US as well as a key consumption hub.

West Coast inventories fell 3,000 barrels to 3.2 million barrels, despite 16,000 b/d of imports. Ethanol imports typically flow into California, as imported sugarcane-based ethanol from Brazil generates more value from carbon credits under the state’s Low Carbon Fuel Standard.

The four-week rolling average of the refiner and blender net ethanol input decreased by 5,000 b/d to 839,000 b/d, while the weekly average rose by 1,000 b/d to 840,000 b/d.

The four-week rolling average of gasoline demand, represented by product supplied, declined by 64,000 b/d to 8.478 million b/d. The weekly average rose by 14,000 b/d to 8.529 million b/d.

The four-week rolling average of the ethanol blending rate, calculated by dividing the refiner and blender ethanol input by gasoline demand, increased to 9.90% from 9.88%.