US DATA: EIA says ethanol production dips, stocks hit multi-year high

US ethanol production averaged 1.026 million b/d in the week ended March 11, down 2,000 b/d week-on-week, US Energy Information Administration data showed March 16.

Production receded slightly from the previous week's six-week high, but was 55,000 b/d higher year-on-year.

US ethanol stocks added 674,000 million barrels to end the week with 25.945 million barrels, the highest level since the week ended April 24, 2020. Sources have said that ample ethanol supplies have kept physical prices below paper values in recent weeks.

US Gulf Coast stocks led all builds at 599,000 barrels. The region is the most common origin for exports but also hosts large consumption hubs.

Midwest inventories added 207,000 barrels. The Midwest hosts the most liquid trading hub in the US at a Kinder Morgan terminal near Chicago, as well as most of the ethanol production plants in the US. According to a market source, the Argo terminal was filling up rapidly and was at 72% capacity earlier in the week.

East Coast stocks inched up by 4,000 barrels. New York Harbor barge interest has been minimal in recent trading days, with most trading coming on the March/April spread.

West Coast inventories increased by 121,000 barrels, with no imports reported. 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 was 16,000 b/d higher at 885,000 b/d, while the weekly average rose 1,000 b/d to 897,000 b/d.

The four-week rolling average of gasoline demand, represented by product supplied, rose by 94,000 b/d to 8.827 million b/d. The weekly average fell 18,000 b/d to 8.944 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, rose to 10.03% from 9.95%, the highest level since the week ended June 25, 2021.