Ethanol futures climbed a second day in Chicago after an Energy Department report showed inventories fell the most in almost four months.
Prices rose 0.2 percent a day after the government said ethanol stockpiles fell to 21.8 million barrels, the lowest amount since Feb. 17, and production of conventional gasoline blended with the biofuel increased 0.9 percent to 5.26 million barrels a day, the most since Dec. 16.
“You had a pretty healthy draw yesterday,” said Jerrod Kitt, an analyst at Linn Group in Chicago. “That really perked up interest. That’s the best report the EIA gave on ethanol in a long time.”
Denatured ethanol for May delivery rose 0.5 cent to settle at $2.241 a gallon on the Chicago Board of Trade. Futures have gained 1.7 percent this year.
In cash market trading, ethanol on the West Coast added 1.5 cents, or 0.6 percent, to $2.36 a gallon and in the U.S. Gulf the additive advanced 1 cent to $2.275, according to data compiled by Bloomberg.
Ethanol in Chicago jumped 1 cent to $2.215 a gallon and in New York the biofuel climbed 1 cent to $2.29.
The additive is blended with gasoline to stretch supply and meet federal mandates.