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US ethanol producers cut output pressured by weak gasoline, report

Large producers of ethanol in the US including Valero Energy are reducing their production because they are feeling squeezed on one side by weakening prices of gasoline and fuels and on the other by rising prices for the corn they use as feedstock, Bloomberg News reported on February 25.



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Valero Energy and Green Plains, which together represent some 15% of this market with many producers, are some of the companies that have chosen to cut output because of the poorer margins, the news agency said.

The total ethanol production in the US in January fell nearly 5% from December to an annualized rate of 14,500 million gallons compared with the previous month, according to statistics cited by the news agency.

Nearly all ethanol production in the US comes from the center-north of the country where there are States which have traditionally grown corn, like Iowa. In several regions of the US drivers can choose to load mixes with as much as 85% ethanol and only 15% gasoline.

 

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