Ethanol Blog

RBOB-Gasoline-to-Ethanol Spread Remains Wide

Rick Kment
By  Rick Kment , DTN Analyst

Ethanol futures prices, which are trading at the highest levels since December 2014, are still holding a significant discount to the RBOB gasoline price, which is consistently hovering over $2 per gallon. Over the last two months, ethanol's discount to the gasoline market has shifted from 14 cents to 45 cents per gallon as the current price spread is showing a 40.8-cent-per-gallon discount. Additional price shifts are expected to be seen over the next couple of weeks as increased movement concerning expected demand for early summer driving activity and inventory shifts will continue to rock the energy sector. But the stability of corn prices seen over the last couple of weeks as well as strong planting progress so far through the spring may limit any upward shifts in ethanol prices through the month of May. This could expand the market spread to over 50 cents per gallon, which has not been seen since October 2014.

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

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