US ethanol stocks for the week ended May 9 firmed 162,000 barrels to 17.302 million barrels on higher production and imports, Energy Information Administration data showed Wednesday.
Production in the week rose 28,000 b/d to 922,000 b/d and imports soared to an eight-month high of 43,000 b/d after none were reported for two straight weeks, according to the EIA.
The soaring imports were shipments booked when US ethanol prices were at eight-year highs and the arbitrage window for imports from Brazil was open in early April, sources said.
US ethanol prices were reacting bullishly to an unexpected rise in demand, sources said.
The four-week rolling average of gasoline demand rose 143,000 b/d to 8.758 million b/d, and the four-week rolling average of the refiner and blender net ethanol input soared 10,000 b/d to 863,000 b/d amid a 44,000 b/d jump to 890,000 b/d in the weekly refiner and blender net ethanol input.
US ethanol stocks firmed in all but two regions. East Coast ethanol stocks moved up 148,000 barrels to 6.377 million barrels, the highest level in nearly 10 months and rising from an all-time low for an eighth straight week.
Gulf Coast stocks added 77,000 barrels to 2.97 million barrels and West Coast stocks nudged up 39,000 barrels to 1.95 million barrels.
Midwest stocks, on the other hand, fell 84,000 barrels to a five-month low of 5.703 million barrels, the lowest difference from East Coast stocks in eight months. Rocky Mountain stocks were 17,000 barrels lower at 302,000 barrels.
As the proportional rise in blending demand was outweighed by the soaring gasoline demand, the four-week rolling average of the ethanol blending rate -- calculated by dividing the four-week rolling averages of the net ethanol input and gasoline demand -- fell 0.05 percentage point to a 9.85%, 0.15 percentage point shy of the 10% "blend wall."
The blend wall occurs when the maximum amount of the US gasoline pool has been blended to a level of 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.
