Nov. 20 (Bloomberg) -- Ethanol futures climbed to a three- week high as U.S. inventories declined and amid signs of increased blending demand from refiners.
Ethanol advanced as much as 1.3 percent after stockpiles declined for a second straight week, dropping 0.5 percent to 15.1 million barrels for the period ended Nov. 15, the Energy Information Administration said today. Production slid 2.5 percent to 904,000 barrels a day.
"Stocks just declined slightly compared to output," said Jason Ward, a market analyst for Northstar Commodity Investment Co. said today in a telephone interview from Minneapolis. "We’re not building stocks because there’s a healthy demand from the discount-to-gasoline side."
Ethanol’s discount to the motor fuel widened 0.67 cent to 81.02 cents at 12:57 p.m. New York time.
Denatured ethanol for December rose 2.4 cents to $1.86 a gallon on the Chicago Board of Trade, the highest level since Oct. 28. Prices have dropped 15 percent this year.
Gasoline for December delivery added 3.07 cents, or 1.2 percent, to $2.6702 a gallon on the New York Mercantile Exchange. The contract covers reformulated gasoline made to be blended with ethanol before delivery to petrol stations.
December-delivery corn, the main raw material for ethanol, fell 0.25 cent to $4.175 a bushel.
The Environmental Protection Agency tracks compliance with the government mandate for biofuel blending with Renewable Identification Numbers, or RINs, certificates assigned to each gallon that are submitted to the agency and can be traded among refiners.
Generation of U.S. corn ethanol RINs jumped to a 21-month high of 1.17 billion gallons in October, the EPA said Nov. 19. Output of advanced ethanol RINs, which included biodiesel and Brazilian sugarcane ethanol, slumped by about half, to 29.8 million gallons, from 65.1 million gallons in September.
Corn-based RINs rose 1 cent to 19 cents today, the first increase since Nov. 6, while advanced RINs fell 2 cents to 20 cents.
--With assistance from Eliot Caroom in New York. Editors: Charlotte Porter, Margot Habiby
To contact the reporter on this story: Lucia Kassai in Houston at firstname.lastname@example.org
To contact the editor responsible for this story: Dan Stets at email@example.com