US ethanol stocks for the week ended May 2 fell 72,000 barrels to 17.14 million barrels, while production dipped by 4,000 b/d to 894,000 b/d, Energy Information Administration data showed Wednesday.
While the production decline had been expected with multiple facilities going offline for spring maintenance, the stock drop was not, sources said. In the previous reporting week, US ethanol stocks hit their highest levels in nine months.
No imports were reported for the second straight week.
Ethanol prices across all regions have plunged since hitting eight-year highs on March 31 as rebounding supplies and slumping demand have put significant downward pressure on values.
Ethanol stocks declined in all but two US regions after rising in all five for the first time since November 2012 for the week ended April 18. East Coast ethanol stocks moved up 307,000 barrels to 6.229 million barrels, their highest level in more than nine months and rising from an all-time low for a seventh straight week.
Midwest stocks fell 318,000 barrels to a four-month low of 5.787 million barrels, Gulf Coast stocks lowered 71,000 barrels to 2.893 million barrels, Rocky Mountain stocks were 3,000 barrels lower at 319,000 barrels, while West Coast stocks nudged up 12,000 barrels to 1.911 million barrels.
The four-week rolling average of gasoline demand fell 69,000 b/d to a seven-week low of 8.615 million b/d, and the four-week rolling average of the refiner and blender net ethanol input shed 1,000 b/d to 853,000 b/d.
As the proportional decrease in blending demand was outweighed by the tumbling gasoline demand, the four-week rolling average of the ethanol blending rate -- calculated by dividing the four-week rolling averages of the net ethanol input and gasoline demand -- gained 0.07 percentage point to a nine-week high of 9.83%, 0.1 percentage point shy of the 10% "blend wall."
The blend wall occurs when the maximum amount of the US gasoline pool has been blended to a level of 10% ethanol. Refiners then will be under pressure to run higher ethanol blends, buy renewable credits known as RINs or push for Congress to alter the Renewable Fuel Standard.
