A 400,000-barrel build along the US East Coast helped boost overall US weekly ethanol stocks to 19.8 million barrels for the week ending January 20, the highest level since late May, according to the most recent weekly data released Wednesday by the Energy Information Administration.
Specifically, total inventories had not been this high since May 27, when the EIA reported them at 17.058 million barrels. Stocks have increased 2,742 barrels, or 16.1%, since the week ending December 9, making for the sixth straight week of gains.
The overall US ethanol stocks build was helped by US East Coast inventories that grew to 7.5 million barrels. Stocks in that region have also not been that high since May 27, when they were at 7.587 million barrels. Inventories on the US West Coast, which had remained static at 2.3 million barrels the previous two weeks, also increased as they edged up 100,000 barrels to 2.4 million barrels.
The only draw in inventory was seen in the Midwest, where ethanol stocks fell 300,000 barrels to 6.3 million barrels. Inventories in the US Gulf Coast and Rocky Mountain areas remained at 3.3 million barrels and 300,000 barrels, respectively.
Weekly ethanol production declined for the third week in a row to 934,000 b/d, down 7,000 b/d from the previous week to the lowest figure since November 25, when it was at 930,000 b/d.
Conversely, weekly ethanol blending percentage rose for the third straight week to 90.9%, the highest blending percentage since November 4. This was a result of two factors: lower overall gasoline production and higher production of gasoline blended with ethanol. Overall gasoline production decreased 249,000 b/d to 8.539 million b/d, the lowest figure in almost two years. The last time gasoline production was this low was February 2, 2010, when it was at 8.428 million b/d. The amount of gasoline blended with ethanol, however, climbed for the third straight week to 7.762 million b/d, up 71,000 b/d from the previous week.
The amount of gasoline blended with ethanol was calculated by adding the volumes of reformulated gasoline blended with ethanol and conventional gasoline blended with ethanol. The ethanol blending percentage is calculated by dividing the weekly amount of gasoline blended with ethanol by weekly total gasoline production.
The four-week rolling average of gasoline demand was at its lowest point in almost 10 years, as it was reported for the week ending January 20 at 8.207 million b/d, and was last at this low level during the week ending February 8, when the EIA showed it at 8.143 million b/d. Lower gasoline demand generally leads to weaker ethanol demand, making a higher ethanol blending percentage that much more important to ethanol producers, said sources.
