Ethanol inventory levels increased 45.2 million gallons at the end of last week according to the latest EIA report released Wednesday morning.
This accounted for a 6% rise in overall stock levels throughout the country. The most shocking development in this move is that this buildup comes after two weeks of sharp inventory losses.
Total inventory levels are at 794 million gallons, which is 8.5% over year-ago levels. Any expectations that overall stock levels would be drawn down to year-ago levels or below by the end of the year have now been dashed, which may create additional pressure on the ethanol market during coming weeks.
The rebound in inventory levels comes as the East Coast recovers from the chain of storms which started with Hurricane Sandy, and then was followed by severe winter storms. But as transportation systems got back to normal, inventory levels rebounded aggressively.
Production of ethanol decreased 1.6% or 546,000 gallons per day last week, but compared to the sharp rally in ethanol inventory, this decrease will be easily overlooked heading into the Thanksgiving holiday.
Rick Kment can be reached at email@example.com
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