Ethanol Futures Climb Toward $2.5 Mark

Ethanol futures traded around $2.5 per gallon, pulling away from the tight range seen during most of this year, as investors continued to balance the demand-supply outlook.

The price of ethanol, the corn-based fuel that is a common gasoline additive, moved higher in tandem with gasoline and crude oil after OPEC+'s surprise announcement of a production cut of more than 1 million barrels a day added worries about tight global supplies.

At the same time, the US Environmental Protection Agency proposed a rule allowing gasoline sales with a higher ethanol blend in some US Midwest states, lifting the demand outlook for the renewable fuel.

In the latest report from the EIA, fuel ethanol blending will likely average 930,000 barrels per day in 2023 but increase to 940,000 million barrels per day in 2024.

Fuel ethanol blending averaged 910,00 million barrels per day in 2022.