Ethanol Futures Decline to One-Year Low as Crude Oil Tumbles
Ethanol fell to the lowest price in a year, declining along with crude, after OPEC agreed to raise its oil production ceiling and on concern that Europe’s debt crisis will worsen.
Futures dropped 2.1 percent as the Organization of Petroleum Exporting Countries said it would lift its production limit to 30 million barrels a day, and as the euro fell below $1.30 on concern the region’s debt crisis is being exacerbated. Ethanol is part of U.S. plans to reduce oil consumption.
Denatured ethanol for January delivery sank 4.5 cents to $2.066 a gallon on the Chicago Board of Trade, the lowest price since Dec. 7, 2010. the futures have fallen 13 percent this year, heading for the first yearly decline since 2008.
In cash market trading ethanol in New York decreased 15.5 cents, or 6.3 percent, to $2.295 a gallon and in Chicago the additive fell 15.5 cents, or 6.7 percent, to $2.17, according to data compiled by Bloomberg.
Ethanol on the West Coast fell 7.5 cents, or 3.1 percent, to $2.325 a gallon and in the U.S. gulf the biofuel slipped 5 cents, or 2.1 percent, to $2.325.
Crude oil for January delivery declined $5.19, or 5.2 percent, to $94.95 a barrel on the New York Mercantile Exchange, the lowest settlement since Nov. 4 and the biggest percentage drop since Sept. 22. Prices are up 3.9 percent this year after climbing 15 percent in 2010.
Gasoline for January delivery dropped 12.17 cents, or 4.6 percent, to $2.5037 a gallon in New York. The contract covers reformulated gasoline, which is made to be blended with ethanol before delivery to filling stations.
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