Chicago spot ethanol prices rallied Wednesday after the U.S. Energy Information Administration showed domestic fuel ethanol stocks fell 600,000 bbl to the lowest supply level in 13 months, at 18.4 million bbl. They were also affected by a deal by the Organization of Petroleum Exporting Countries to cut output by a more-than-expected 1.2 million bpd from January; this sent RBOB futures on the New York Mercantile Exchange to a one-month spot high.
Sources said short-covering was underway in the cash market.
In cash trade, ethanol for prompt delivery at the Argo terminal in the Chicago market traded at $1.65 per gallon, up 3.75 cents on the day. In the rail market, Chicago ethanol traded under Rule 11 was pegged at $1.65 per gallon, up 3.25 cents.
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