Ethanol futures gained for a second day in Chicago as gasoline jumped on concern that Hurricane Sandy will curtail supply.
The biofuel followed the motor fuel higher as refiners including Phillips 66 and PBF Energy Inc. reduced output before the arrival of the storm. Ethanol is blended with gasoline to stretch supply and meet federal mandates.
“Sandy’s affecting it,” said Dan Flynn, a trader at Price Futures Group in Chicago. “We don’t know what we’re going to have.”
Denatured ethanol for November delivery increased 0.4 cent to $2.385 a gallon on the Chicago Board of Trade. Futures have gained 8.3 percent this year.
In cash market trading, ethanol in New York added 2 cents, or 0.8 percent, to $2.47 a gallon and in the U.S. Gulf the biofuel rose 1.5 cents, or 0.6 percent, to $2.46, data compiled by Bloomberg shows.
Ethanol in Chicago climbed 0.5 cent to $2.385 a gallon and on the West Coast the additive declined 1.5 cents, or 0.6 percent, to $2.53.
Gasoline for November delivery advanced 5.77 cents, or 2.1 percent, to $2.7568 a gallon in New York. The contract covers reformulated gasoline, made to be blended with ethanol before delivery to filling stations.
Ethanol-blended gasoline made up about 93 percent of the total U.S. gasoline pool last week, the Energy Department said Oct. 24. The 2012 high is 95 percent in the week ended Oct. 5.
Corn for December delivery was little changed, down 0.75 cent to $7.37 a bushel in Chicago. One bushel makes at least 2.75 gallons of ethanol.
Based on December contracts for ethanol and corn, producers are losing about 31 cents on each gallon of the biofuel made, according to data compiled by Bloomberg. That doesn’t include profit from the sale of dried distillers’ grains, a byproduct of ethanol production that can be fed to livestock.