Ethanol Blog

Jobless Claims Erode Ethanol Support

Rick Kment
By  Rick Kment , DTN Analyst

Market momentum in the ethanol complex was quickly shifted from the aggressive gains seen Wednesday due to tightening supplies.

The pressure in energy markets Thursday which followed increased jobless claims in the weekly report has created some uncertainty about sustained demand for ethanol and gasoline markets.

Jobless claims increased 21,000, to 311,000 which is well above expected levels, and is quickly creating concerns about economic uncertainty. This has a significant impact in energy markets, pushing crude oil futures $2 to $3 per barrel lower, while RBOB gasoline prices slipped 8 cents per gallon following the news.

Although there still remains some solid support in the ethanol market, prices were unable to continue higher following Wednesday's rally. Even the steady to 1.3-cents-per-gallon losses seen in nearby ethanol futures is viewed as negative to the market, especially while corn prices posted solid gains on the day.

For now, any supply issues in the ethanol market are being derailed by fears that demand for gasoline and ethanol through the end of the year may see some significant shifts if weaker economic conditions continue to develop through the remaining summer and early fall months.

Rick Kment can be reached at rick.kment@dtn.com

(ES)

P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
P[] D[728x170] M[320x75] OOP[F] ADUNIT[] T[]
P[L2] D[728x90] M[320x50] OOP[F] ADUNIT[] T[]

Comments

To comment, please Log In or Join our Community .