US DATA: EIA says ethanol production rises again, stocks continue to fall

US ethanol production averaged 938,000 b/d in the week ended March 5, 89,000 b/d higher on the week but 85,000 b/d lower year on year, Energy Information Administration data showed March 10.

The increase was the second consecutive rise in production since a massive cold weather system pounded much of the US. Ethanol producers cut production to take advantage of rising natural gas prices before the weather. Some were later hampered by a lack of electricity during the severe weather.

US ethanol stocks dropped by 355,000 barrels to 22.070 million barrels.

West Coast inventories saw the biggest decrease, falling by 257,000 barrels, as the EIA reported no imports on the week. Ethanol imports typically flow into California, as imported sugarcane-based ethanol from Brazil generates more value from carbon credits under the state's Low Carbon Fuel Standard.

Gulf Coast stocks shed 330,000 barrels. The Gulf Coast is the most common origin for exports but also hosts large consumption hubs.

Stocks in the East Coast region, however, gained 144,000 barrels. The Midwest region, home to most of the ethanol plants in the US and a significant trading hub, saw stocks rise by 108,000.

The four-week rolling average of the refiner and blender net ethanol input rose by 9,000 b/d to 787,000 b/d, while the weekly average increased by 4,000 to 818,000 b/d.

The four-week rolling average of gasoline demand, represented by product supplied, grew by 217,000 b/d to 8.122 million b/d. The weekly average increased by 578,000 b/d to 8.726 million b/d.

The four-week rolling average of the ethanol blending rate, calculated by dividing the refiner and blender ethanol input by gasoline demand, fell to 9.69% from 9.84%.