Ethanol Blog

Ethanol Premium to Gasoline Evaporates

Rick Kment
By  Rick Kment , DTN Analyst

In just one short trading session, the strong 14-cent price premium that the ethanol market held over the RBOB gasoline futures price has evaporated. The turn of events Wednesday was somewhat odd, as the much-watched weekly EIA report posted inventory gains in not only ethanol markets but also gasoline and crude oil markets. This latest shift in the price premium that ethanol had been accustomed to since early December came about with sharp losses in ethanol futures and an aggressive 8 cent rally in RBOB gasoline markets. It is uncertain if prices of both markets will be able to be uniformly priced through the upcoming sessions, as there is a lot of volatility in both the gasoline and ethanol markets based on product availability and demand expectations. But for the moment, both ethanol and gasoline are on the same playing field. But like they say, "tomorrow is a brand new day" and anything is possible.

Rick Kment can be reached at rick.kment@dtn.com

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