Jan. 4 (Bloomberg) -- Ethanol futures slipped from a four-month high in Chicago on speculation that record production is outpacing demand for the biofuel.
Futures slid after MasterCard’s SpendingPulse report showed gasoline demand fell 14 percent to 8.16 million barrels a day in the week ended Dec. 30, the lowest level in seven years. Ethanol production averaged 962,000 barrels a day in the week ended Dec. 23, an all-time high, according to the Energy Department.
“There’s not a huge demand,” said Justin Dirico, senior ethanol analyst at SCB & Associates LLC in Chicago. “There’s lack of demand for physical gallons. Unless we get more gasoline demand, I don’t see this changing until spring.”
Denatured ethanol for January delivery fell 1.2 cents, or 0.5 percent, to settle at $2.228 a gallon on the Chicago Board of Trade. Futures have declined 3.7 percent in the past year.
In cash market trading, ethanol was unchanged in New York at $2.405 a gallon, in the U.S. Gulf at $2.375 and on the West Coast at $2.405, according to data compiled by Bloomberg.
Ethanol in Chicago increased 1 cent, or 0.4 percent, to $2.265 a gallon.
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