Ethanol Rebounds With Rail Congestion Slowing Supplies
By Mario Parker
Ethanol advanced for the first time in three days on speculation that rail congestion hampering production and supply will take some time to ease.
Futures climbed 4.3 percent, a day after consecutive declines of 10 percent and 7.8 percent. While an Energy Information Administration report showed stockpiles gained last week, inventories are 9.2 percent lower than a year ago and are below average for this time of year.
“It just got beat up so much over the last couple days and now it’s fighting its way back,” said Mark Ruyack, a broker at StarFuels Inc. in Jupiter, Florida. “The rail issues aren’t going to be fixed anytime soon. That’s going to take some time.”
Denatured ethanol for May delivery rose 10 cents to $2.404 a gallon on the Chicago Board of Trade. Prices touched $3.517 on April 1, the highest settlement in more than seven years. Futures have gained 26 percent this year.
Gasoline for May delivery added 1.95 cents, or 0.7 percent, to $2.9313 a gallon on the New York Mercantile Exchange. The contract covers reformulated gasoline, made to be blended with ethanol before delivery to filling stations.
Ethanol’s discount to gasoline was 52.73 cents, down from
60.78 cents yesterday.
Stockpiles of the additive expanded 1.4 percent to 15.9 million barrels, the most in three weeks, data from the Energy Department’s statistical arm showed. Production rose 4.2 percent to 922,000 barrels a day, the biggest jump since Jan. 17 and the highest level since Dec. 20.
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