EIA says US ethanol production falls again, stocks drop sharply

Houston — US ethanol production averaged 537,000 b/d for the week ended April 24, a decrease of 26,000 b/d, setting another 12-year low for the third straight week, data from the Energy Information Administration showed Wednesday.

Production was down 487,000 b/d year on year.

Production now has fallen for eight consecutive weeks, as ethanol plants across the country idle or dial back production in response to the coronavirus pandemic. Shelter-in-place orders across the US have slashed demand for motor gasoline and its blendstocks to historic levels.

US ethanol stocks shed 1.352 million barrels, ending a five-week build that saw inventories swell as demand plummeted.

All five defined regions saw decreases in inventories last week. The Gulf Coast region saw the largest draw, dropping by 558,000 barrels, or 9.51%, to 5.312 million barrels. The Gulf Coast is the origin for most ethanol exports from the US, as well as a large consumption hub.

The West Coast region saw a decline of 331,000 barrels, or 10.05%, to 2.961 million barrels. The EIA reported no imports in the region. 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.

East Coast stocks shed 242,000 barrels, or 2.50%, to end the week with 9.438 million barrels. East Coast hubs such as New York harbor have seen thin liquidity in recent weeks due to large supplies and limited storage space. In consequence, barges in the hub have seen their premiums to front-month paper decline sharply.

In the Midwest region, stocks fell by 205,000 to 8.218 million barrels. The Midwest is the home to most of the country's ethanol plants, and is a dominant hub for trading the biofuel.

The four-week rolling average of the refiner and blender net ethanol input rose by 6,000 b/d to 529,000 b/d, while the weekly average rose by 50,000 b/d to 583,000 b/d.

The four-week rolling average of gasoline demand, represented by product supplied, decreased by 200,000 b/d to 5.329 million b/d, while the weekly average rose 549,000 b/d to 5.860 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 9.93% from 9.46%.