US ethanol production averaged 724,000 b/d for the week ended May 22, an increase of 61,000 b/d, and the fourth consecutive weekly rise, data from the US Energy Information Administration showed Thursday.
However, production was down 333,000 b/d year on year. Production, which was at the highest level since the week ended March 27, was in the middle of market expectations.
Ethanol production's steady rise in recent weeks reflects the rise in the demand for motor gasoline. Demand for fuel has been climbing as states have eased shelter-in-place restrictions imposed to battle the coronavirus pandemic.
US ethanol stocks shed 450,000 barrels to 23.176 million barrels, the lowest level since the week ended January 10. The decline in inventories also in line with market expectations.
Four of the five defined regions saw decrease in inventories last week. The West Coast region saw the largest draw, a decline of 203,000 barrels, or 7.79%, to 2.403 million barrels. The EIA reported no imports in the region. 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.
The Gulf Coast region shed 162,000 barrels, or 3.01%, to 5.223 million barrels. The Gulf Coast is the origin for most ethanol exports from the US, as well as a large consumption hub.
East Coast stocks dropped by 88,000 barrels, or 1.10%, to end the week with 7.906 million barrels.
In the Midwest region, stocks fell by 11,000 barrels to 7.260 million barrels. The Midwest is the home to most of the country's ethanol plants, and is a dominant hub for trading the biofuel.
The four-week rolling average of the refiner and blender net ethanol input rose by 32,000 b/d to 663,000 b/d, while the weekly average rose by 32,000 b/d to 712,000 b/d.
The four-week rolling average of gasoline demand, represented by product supplied, increased by 348,000 b/d to 7.026 million b/d, while the weekly average rose 463,000 b/d to 7.253 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 9.44% from 9.45%.
