Ethanol Output in U.S. Falls 1.6% to 816,000 Barrels a Day

Ethanol production in the U.S. fell 1.6 percent to 816,000 barrels a day last week, the lowest level in six weeks.

Output declined the most since July 13, sliding to the smallest amount since July 27, the Energy Department said in a report today. Stockpiles climbed 1.2 percent to about 19 million barrels, the highest level in six weeks, in the longest streak of gains since March. Imports averaged 89,000 barrels a day compared with 34,000 the previous week.

Ethanol producers have wrestled with negative margins to manufacture the fuel in the face of higher corn costs as the worst U.S. drought in more than 50 years parched crops in the grain-rich Midwest.

Conventional gasoline blended with ethanol fell 6.6 percent to 5.04 million barrels a day, the lowest level since Feb. 10, the report showed, and the fuel comprised the least amount of the gasoline supply since Jan. 13.

Denatured ethanol for October delivery slipped 1.7 cents to $2.438 a gallon at 10:22 a.m. on the Chicago Board of Trade. Prices have gained 11 percent this year.

To contact the reporter on this story: Mario Parker in Chicago at mparker22@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

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