US ethanol production fell 13,000 b/d to a three-week low of 844,000 b/d the reporting week ended August 16, but ethanol stocks rose 57,000 barrels to 16.482 million barrels, Energy Information Administration data showed Wednesday.
The slight increase in ethanol stocks came from builds in the East Coast, Gulf Coast and Rocky Mountain regions.
East Coast ethanol stocks jumped 199,000 barrels to a four-week high of 6.223 million barrels, reversing course after a three-week decline. Gulf Coast ethanol stocks grew 92,000 barrels to 2.875 million barrels. Ethanol stocks in the Rocky Mountain region edged up 1,000 barrels to 301,000 barrels.
Midwest ethanol stocks dropped 75,000 barrels to 5.338 million barrels while West Coast ethanol stocks shrank 160,000 barrels to a three-week low of 1.746 million barrels.
The ethanol days of supply -- calculated by dividing weekly ethanol stock levels by the weekly refiner and blender ethanol net input -- dipped by 0.2 day to a six-week low of 19 days of supply on a greater proportional increase in the weekly refiner and blender ethanol net input than weekly ethanol stock levels.
The weekly refiner and blender ethanol net input climbed 11,000 b/d, or 1.3%, to a six-week high of 686,000 b/d, while weekly ethanol stocks rose only 0.35%.
Weekly ethanol imports shed 17,000 b/d to 19,000 b/d, with 12,000 b/d headed to the East Coast and the remaining 7,000 b/d headed to the West Coast.
The weekly ethanol blending percentage slid 2.5 percentage points to 91.7% on a gain in the weekly amount of gasoline produced that outpaced that of the weekly amount of gasoline blended with ethanol.
The weekly amount of gasoline produced jumped 364,000 b/d to 9.436 million b/d as the weekly amount of gasoline blended with ethanol moved up 103,000 b/d to a six-week high of 8.652 million b/d.
The amount of gasoline blended with ethanol is calculated by adding the volume of reformulated gasoline blended with ethanol and conventional gasoline blended with ethanol. The ethanol blending percentage is calculated by dividing the weekly amount of gasoline blended with ethanol by weekly total gasoline production.
The four-week rolling average of gasoline demand rose 55,000 b/d to 9.196 million b/d, the highest level in more than two years as it had not been this high since the reporting week ended July 8, 2011, when it was at 9.226 million barrels. Gasoline demand was 2.04% higher than it was at this time last year, and year-to-date, current year levels were 0.41% higher than 2012.
The four-week rolling average of the refiner and blender net input of ethanol edged up 4,000 b/d to a six-week high of 862,000 b/d.
With gasoline demand at the highest level in more than two years, the four-week rolling average of the ethanol blending rate -- calculated by dividing the four-week rolling average of the weekly refiner and blender net ethanol input by the four-week rolling average of gasoline demand -- fell for the seventh consecutive week, nudging down 0.01 percentage point to a six-month low of 9.37%, 0.63 percentage point shy of the 10% "blend wall."
This was the lowest four-week rolling average of the ethanol blending rate since the reporting week ended February 15, when it was at 9.34%.
Currently, most non-flex-fuel vehicles in the US run on E10, or a 10% ethanol-gasoline mix. Some newer model years also have US Environmental Protection Agency clearance to run E15.
The blend wall, which some observers think could be hit this year, describes when the maximum amount of the US gasoline pool has been blended with 10% ethanol. Refiners then will be under pressure to run higher ethanol blends, buy renewable credits known as RINs, or push for Congress to alter the Renewable Fuel Standard.
RINs are a credit that can be used to meet federal renewables mandates for fuel sold in the US. Refiners and other obligated parties can meet the targets by blending renewables like biodiesel and ethanol with fuel like diesel and gasoline, buying RINs, exporting refined products or altering their production of fuel that is not subject to the US mandates, such as jet fuel.
