Ethanol Gains Second Day on Speculation Fed Will Boost Economy
Futures rose after the Labor Department said jobless benefit claims climbed by 6,000 to 386,000 in the week ended June 9 and consumer prices fell by the most in three years. Ethanol followed equities higher on predictions that the Fed will act to stimulate growth.
“That’s what we’ve been conditioned to think,” said Peyton Feltus, president of Randolph Risk Management Inc. in Dallas. “Not just the Fed, but central banks in general. That’s what everybody thinks will happen.”
Denatured ethanol for July delivery gained 1.5 cents, or 0.7 percent, to settle at $2.065 a gallon on the Chicago Board of Trade. Prices have fallen 6.3 percent this year.
In spot market trading, ethanol in New York soared 7 cents, or 3.4 percent, to $2.115 a gallon and in Chicago the additive rose 5.5 cents, or 2.8 percent, to $2.045, according to data compiled by Bloomberg.
Ethanol in the U.S. Gulf gained 4.5 cents, or 2.2 percent, to $2.105 a gallon and on the West Coast the biofuel increased 2 cents, or 0.9 percent, to $2.175.
The biofuel is made from corn in the U.S. and blended with gasoline to stretch supply and meet federal mandates to decrease consumption of fossil fuels.
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