April 19 (Bloomberg) -- Ethanol in Chicago rose the most in almost three weeks on increased demand for the fuel to be blended with gasoline.
Prices climbed a day after the Energy Department said production of conventional gasoline blended with ethanol, a measure of consumption beyond what’s mandated by the government, swelled to a record 5.4 million barrels a day, spurred by the additive’s discount to the motor fuel.
“You had a really good blending number, which was surprising,” said Jerrod Kitt, an analyst at Linn Group in Chicago. “It was really strong. That dollar discount to gasoline continues to work its magic.”
Denatured ethanol for May delivery advanced 4.6 cents, or 2.2 percent, to settle at $2.166 a gallon on the Chicago Board of Trade, the biggest one-day gain since March 30. Prices have dropped 1.7 percent this year.
In cash market trading, ethanol in New York surged 7 cents, or 3.2 percent, to $2.265 a gallon and in Chicago the additive jumped 5 cents, or 2.4 percent, to $2.15, according to data compiled by Bloomberg.
Ethanol in the U.S. Gulf rose 4.5 cents, or 2.1 percent, to $2.21 a gallon and on the West Coast the biofuel added 1 cent to $2.29.
Under a 2007 energy law, the U.S. is required to consume 13.2 billion gallons of renewable fuels such as ethanol this year, up from 12.6 billion last year.
Gasoline for May delivery slumped 4.86 cents, or 1.5 percent, to $3.1541 a gallon on the New York Mercantile Exchange. The contract includes reformulated gasoline, or RBOB, which is made to be blended with ethanol before delivery to filling stations.
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