Ethanol Gains in Chicago Following Increase in Gasoline Futures
Ethanol futures rose in Chicago, following an increase in gasoline prices.
Ethanol was the third-worst performing energy commodity in 2011, behind natural gas and coal. Stockpiles of the fuel additive gained 5.8 percent to 20.9 million barrels the week ended Jan. 27, the highest level since the Energy Department began keeping weekly records in June 2010. Production rose to 939,000 barrels a day, the first advance this year.
“Earlier last week we saw a massive sell-off of ethanol prices and it’s a bit of a technical rebound,” said Terry Reilly, an analyst at Citigroup Global Markets in Chicago.
Denatured ethanol for March delivery climbed 2 cents, or 0.9 percent, to $2.193 a gallon on the Chicago Board of Trade, the highest level since Jan. 27.
In cash market trading, ethanol in New York rose 1.5 cents, or 0.7 percent, to $2.20 a gallon and in the U.S. Gulf the additive fell 1 cent, or 0.5 percent, to $2.20, according to data compiled by Bloomberg.
“What you saw across the board was a spread-correction day,” said Jerrod Kitt, an analyst at Linn Group in Chicago.
Ethanol in Chicago rose 0.75 cent, or 0.4 percent, to $2.125 a gallon and on the West Coast the biofuel retreated 1 cent, or 0.5 percent, to $2.225.
Gasoline for March delivery rose 1.35 cents to $2.9279 a gallon on the New York Mercantile Exchange. The contract includes reformulated gasoline, which is made to be blended with ethanol before delivery to filling stations.
Corn for March delivery declined 0.25 cent to $6.4425 a bushel in Chicago. One such unit makes at least 2.75 gallons of ethanol.
To contact the reporter on this story: Ksenia Galouchko in New York at kgalouchko1@bloomberg.net
To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net
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