October 4, 2007

US ethanol output hits third straight record high in July

Ethanol production in the US rose 4 percent in July from June to 13.051 million barrels, a record high for the third straight month, according to the federal Energy Information Administration (EIA).

This is roughly equivalent to 421,000 barrels a day produced at 129 ethanol biorefineries. It represents a surge of 33 percent compared with levels produced in July 2006, according to the EIA report, which was released late Tuesday.

Demand for the gasoline additive also reached an all-time record high in July at 450,000 barrels a day. That's an increase of 7,000 barrels a day on the month, and 25 percent, or 90,000 barrels a day on the year.

Ethanol's rise comes as refiners and blenders incorporate larger amounts of it into the nation's gasoline pool. The White House has made ethanol use the centerpiece of its effort to wean the US off fossil fuels amid recent record-high crude-oil prices.

Monthly demand has averaged about 425,000 barrels a day throughout 2007 so far and continues to support plans for the construction or expansion of 82 ethanol plants in the US, according to a list compiled by the Renewable Fuels Association, the national trade association for the US ethanol industry.

Strong demand kept July's record-setting production level and the 86 percent increase in monthly ethanol imports from raising US inventory levels to all-time highs.

US ethanol inventories stood at 9.696 million barrels in July, an increase of 7 percent on the month, and 25 percent on the year.

Imports of ethanol to the US stood at 1.523 million barrels, or about 49,129 barrels a day, in July, according to the EIA's final report. The data were unchanged from the agency's mid-September preliminary findings.

Brazil was again the largest exporter in the month, more than doubling volumes to 1.051 million barrels in eight shipments. That works out to about 33,903 barrels a day, from around 16,267 barrels a day over seven shipments totaling 488,000 barrels in the previous month.