Argo Plunge to 3mos Low on Glutted Supply, Demand Falloff
11/20 4:43 PM
Argo Plunge to 3mos Low on Glutted Supply, Demand Falloff WASHINGTON, D.C. (DTN) -- Spot ethanol prices across major U.S. trading hubs on Friday posted losses in the range of 1.25cts to 3.5cts, with product at the Argo terminal in Chicago dropping to the lowest price point since mid.-August at $1.36 amid building stockpiles in the Midwest PAD 2 district and slowing blending demand nationwide as surging COVID cases dent driving activity heading into the Thanksgiving holiday. Wednesday's release of inventory data from the U.S. Energy Information Administration was bearish for the ethanol complex, showing another weekly increase in nationwide stockpiles and a sharp drop-off in blending demand. Blending activity, a measure of demand, fell 2.5% in the most recent week to the lowest weekly rate since mid-June at 813,000 bpd. This correlated with weaker demand for motor gasoline, which dropped 504,000 bpd to 8.258 million bpd in the reviewed week, widening its year-on-year deficit to 10%. Apple data shows traffic volumes in the United States has taken a hard hit from surging COVID cases and subsequent restrictions on businesses and personal mobility. With Centers of Disease Control issuing a warning against travel during the Thanksgiving holiday, traders see little upside for ethanol demand in coming weeks. Lower blending demand has led to another weekly build in nationwide stockpiles that has now increased for the third week in row to 20.203 million bbl -- the highest since the first week of September. Midwest PADD 2 stocks have risen over 3% to 6.3 million bbl, while East Coast PADD 1 stockpiles declined a second week, down 1.6% to 6.2 million bbl. At the Gulf Coast PADD 3, stocks dropped 2.4% to 4.1 million bbl and stocks along the West Coast PADD 5 were marginally higher at 3.1 million bbl. Liubov Georges, 1.646.359.4088,, (c) Copyright 2020 DTN, LLC. All rights reserved.
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