Ethanol’s Discount to Gasoline Expands on Refinery MaintenanceApr 2nd 2013
Ethanol weakened against gasoline as prices for the motor fuel gained on speculation seasonal refinery maintenance will limit supply.
The spread, comparing front-month contracts, expanded 1.58 cents to 70.31 cents a gallon at 3:02 p.m. New York time. Gasoline stockpiles in the U.S. probably fell 1 million barrels last week, according to the median of 12 analysts in a survey by Bloomberg.
“It’s the time of year where you get some preparation before the summer driving season,” said Jerrod Kitt, an analyst at Linn Group in Chicago.
Denatured ethanol for April delivery rose 2.6 cents, or 1.1 percent, to $2.437 a gallon on the Chicago Board of Trade. The March futures contract, which expired today, increased 2.6 cents to $2.43.
Gasoline futures for April delivery advanced 4.99 cents, or 1.6 percent, to settle at $3.1482 a gallon on the New York Mercantile Exchange. The contract covers reformulated gasoline, which is made to be blended with ethanol before delivery to filling stations.
Kitt said as the refineries return from maintenance ethanol demand should increase.
“That’s more opportunities to blend ethanol,” he said.Ethanol-blended gasoline made up 88 percent of the total U.S. gasoline supply in the week ended Feb. 22, down from about 90 percent the previous week and the lowest level since Jan. 25, according to the U.S. Energy Information Administration.