Ethanol Falls Most in More Than Week on European Debt Concern
Ethanol futures fell the most in more than a week in Chicago on concern that the European debt crisis will curtail commodity demand.
Prices slumped after Spain asked euro-region governments for as much as 100 billion euros ($126 billion) to help support its banking system. Ethanol, made from corn in the U.S., is blended with gasoline to stretch supply. The U.S. exports the fuel to European nations such as the U.K., Finland, Germany and the Netherlands, according to the Energy Department.
“They’re just throwing money at a dead horse,” said Dan Flynn, an energy and grains trader at the Price Futures Group in Chicago. “That kind of broke the back of the energies and the grains. It’s looking negative.”
Denatured ethanol for July delivery fell 1.6 cents, or 0.8 percent, to settle at $2.061 a gallon on the Chicago Board of Trade, the biggest one-day decline since June 1. Prices have fallen 6.4 percent this year.
In spot market trading, ethanol in New York slipped 2 cents, or 1 percent, to $2.08 a gallon and on the West Coast the additive sank 2 cents to $2.17, according to data compiled by Bloomberg.
Ethanol in the U.S. Gulf dropped 1.5 cents to $2.08 a gallon and in Chicago the biofuel decreased 2 cents to $2.01.
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