Front-month New York Harbor ethanol Monday moved to a 1.75 cent/gal discount to second-month as regional oversupply continued to weaken the market.
"Prompt New York Harbor is definitely a bit weak it seems," said one source. "I guess there must be a few too many barrels floating around."
Ethanol typically enters seasonal backwardation as gasoline demand, and thus ethanol demand, reaches its annual peak in the summer.
The last time the front-month was at such a premium to second-month barges was the end of March, when the market was moving from contango to backwardation. There was one day, June 20, when front-month barges weakened to a 2.35 cents/gal discount, but that was only for a day.
The discount was 1.5 cents/gal last Thursday and Friday.
But high stocks have pressured prices. East Coast stocks rose 214,000 barrels to 7.838 million barrels in the week ended July 8, most recent US Energy Information Administration data showed. Stocks in the region are 492,000 barrels higher than last year.
