Houston — The US Energy Information Administration on Tuesday adjusted its forecast for US ethanol blending with gasoline in the remainder of 2018 in its August Short-Term Energy Outlook but left the production forecast unchanged.
The outlook showed blending ticked higher in July than originally forecast, which bumped the forecast average for the whole year slightly higher to 945,000 b/d from 941,000 b/d in the July outlook.
For the remainder of the year, the EIA expects 957,500 b/d of ethanol blending into gasoline, up slightly from the August-December expectation of 957,400 b/d in the July outlook.
The ethanol production forecast for the whole of 2018 remained at an average of 1.04 million b/d. July's average production rate was inline with the EIA's forecast of 1.06 million b/d, released in the July outlook.
The EIA's forecast for gasoline consumption for the whole of 2018 ticked lower to 9.308 million b/d from July's outlook for 9.310 million b/d. Consumption in July was slightly higher than the EIA expected but the agency adjusted June's consumption to 9.573 million b/d from 9.625 million b/d, pulling down the year's average.
The US Environmental Protection Agency uses the STEO to build proposed and finalized renewables blending mandates. If transportation fuel forecasts change sharply from the April version of the STEO in the October release of the STEO it can affect the mandates the EPA finalizes.
The EPA uses the April STEO to build its proposed mandates and the October release to finalize the mandates.
A higher gasoline forecast can mean lower biofuels compliance costs as the percentage of the transportation fuel pool devoted to renewables can shrink.
