Ethanol Blog

Spot Ethanol Prices in NYH, Argo Fall on Supply Build

By  George Orwel

U.S. spot ethanol prices fell in early trade in New York and Chicago amid easing supply concerns after Energy Information Administration data released midmorning showed ethanol inventories rebounded from a three-week low, rising 1.2% to 16.7 million barrels (bbl) during the week-ended Aug. 2. Imports received totaled 56,000 barrels per day (bpd) last week, and domestic output ramped up 2.5% at 853,000 bpd. Spot ethanol at the Kinder Morgan-operated Argo terminal near Chicago was seen at a $2.275 to $2.295 gallon bid/ask, down 0.5 cents on the day, while prompt New York Harbor ethanol was pegged at $2.50 gallon, down 4.0 cents.

George Orwel can be reached at george.orwel@telventdtn.com

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Eddy Lahens
8/7/2013 | 3:53 PM CDT
The ethanol industry was producing 856,000 barrels PER DAY and imported 56,000 barrels per day for an approximate total of 912,000 barrels EACH DAY. Now, the Refiners reported using 865,000 barrels per day. I specified all these thousands to make the followng point: When at the end-of-a-week, total inventory changes by 200,000 barrels (not per day but net delta from week 1 to week 2), this is less than 20% of one day production. This production is spread over 200 ethanol plants is easily a rounding error or 1,000 barrels per plant. Now for the Traders to jump on a number like this, Wow! To Mr Orwell, I would recommend that first you set a treshold (ex 500K barrels delta in inventory change) before any valuable deduction can be thought to be significant and second if there is a trend in the data week after week can help steer these views properly.