Ethanol futures rose a second day in Chicago on speculation that blending will rise and on export demand.
Futures climbed on speculation that the biofuel’s discount to gasoline, which has exceeded $1 for most of the past month, will boost blending consumption as refiners pocket the difference between the two fuels. Exports in January, the most recent month data is available from the Energy Department, were 1.82 million barrels, up 33 percent from a year earlier.
“We do have a demand base,” said Mike Blackford, a consultant with INTL FCStone in Des Moines, Iowa. “It’s domestic use and just a little bit of exports here.”
Denatured ethanol for May delivery advanced 0.2 cent to settle at $2.166 a gallon on the Chicago Board of Trade. Prices have dropped 1.7 percent this year.
Production of conventional gasoline mixed with ethanol surged to 5.4 million barrels a day in the week ended April 13, the Energy Department said April 18.
In cash market trading, ethanol on the West Coast jumped 3 cents, or 1.3 percent, to $2.315 a gallon and in the U.S. Gulf the additive increased 2 cents, or 0.9 percent, to $2.22, according to data compiled by Bloomberg.
Ethanol in Chicago added 2 cents, or 0.9 percent, to $2.155 a gallon and in New York the biofuel climbed 0.75 cent, or 0.3 percent, to $2.25.