Houston — The US Energy Information Administration has raised its forecast for ethanol production as well as blending into the US gasoline pool in 2017, the EIA said Tuesday.
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In its Short Term Energy Outlook for January, the EIA's production forecast for 2017 climbed 3,800 b/d from its December outlook. The forecast rose to 1.0046 million b/d from 1.0008 million b/d.
The EIA also forecast there will be an average of 940,000 b/d of fuel ethanol blended with gasoline in 2017, up from its December forecast of 937,000 b/d.
Domestic ethanol consumption has climbed as higher blending mandates encourage obligated parties to blend more ethanol into the gasoline pool. The four-week average of the ethanol blending rate averaged 9.99% in December, up from 9.38% in the same month of 2015.
The four-week rolling average of the ethanol blending rate is calculated by dividing the four-week rolling averages of the net ethanol input and gasoline demand.
Looking at the four-week averages eliminates some of the spikes in blending or gasoline demand that market participants see as questionable.
There has historically been a 10% blend wall, a limit on ethanol blending driven by infrastructure and policy constraints.
January's outlook is also the first that contains a forecast for 2018. The EIA sees ethanol production will average 1.0154 million b/d and blending will average 947,000 b/d in 2018.
--Josh Pedrick, firstname.lastname@example.org
--Edited by Jason Lindquist, email@example.com