US ethanol stocks for the week ended April 18 moved up 566,000 barrels to a seven-week high of 16.518 million barrels, despite a production dip of 29,000 b/d to 910,000 b/d, Energy Information Administration data showed Wednesday.
While the production decline had been expected with multiple facilities going offline for spring maintenance, the bump in stockpiles caught some sources off-guard. One trader suggested the drop in blending demand and rise in imports were likely the biggest factors.
Imports were reported at 11,000 b/d after returning to zero b/d in the previous report. EIA data showed the first imports in six months for the week ended March 21. Prices across all regions have plunged since hitting eight-year highs on March 31 as rebounding supplies and slumping demand have put significant downward pressure on values.
US ethanol stocks were at their highest level since the week ended February 28 as supplies rose in all five regions for the first time since November 2012. East Coast ethanol stocks moved up 156,000 barrels to 5.361 million barrels, the highest level since January and rising from an all-time low for a fifth straight week.
Midwest stocks moved up 33,000 barrels to 6.23 million barrels, Gulf Coast stocks added 106,000 barrels to 2.503 million barrels, West Coast stocks gained 259,000 barrels to 1.962 million barrels, and Rocky Mountain stocks were 12,000 barrels higher at 306,000 barrels.
The four-week rolling average of gasoline demand tumbled 143,000 b/d to 8.689 million b/d, and the four-week rolling average of the refiner and blender net ethanol input fell 1,000 b/d to 851,000 b/d.
As the decline in gasoline demand outweighed the proportional rise in blending 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 -- gained 0.14 percentage point to 9.79%, 0.21 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.
