Ethanol barge price jumps 70 cents/gal to record $4: source

Houston (Platts)--25May2006

A barge delivery of ethanol into Houston was done Thursday for a record
$4/gal, up from the previous high of $3.30-$3.31/gal done May 22-23, a source
close to the latest deal told Platts.

For delivery by June 10, the barge would most likely be from the US
Midwest.

The ethanol price was almost $2/gal over the current spot price of
finished gasoline in the US Gulf Coast of $2.04/gal. RBOB finished the day at
$2.17/gal. With the tax break at the pump 51 cents/gal, ethanol will not
naturally fall below 51 cents/gal over gasoline. At any level below that,
Midwest blenders would likely put extra volumes into gasoline.

Truck deliveries into Houston from the Midwest, meanwhile, were done
Thursday at a high of $3.90/gal, sources said.

The strength in Houston was attributed to a delay in a shipment from
Brazil, as well as the overall tightness seen in the Midwest. Sources in
Brazil were not immediately available for comment on shipping.

Other markets were also up Thursday. In Chicago, the spot market rated
$3.50/gal, about $1.25/gal over the wholesale rack price of gasoline. Spot
prices for finished gasoline were $2.02 gal, and $2.02 /gal for RBOB. New York
ethanol spot bids were also seen at $3.50/gal, FOB New York Harbor. Spot
gasoline there was $2.02/gal, and RBOB $2.23/gal.

The unbranded ethanol wholesale rack average in Omaha, Nebraska, a major
Midwest market, was $3.26/gal, up from $2.70/gal May 1. In New York Harbor,
$3.50/gal was the most-often mentioned level, up from $3.30/gal Wednesday. On
the Chicago Board of Trade Thursday, the June ethanol contract finished up 3
cents/gal, settling at $3.33/gal.

--Robert Sharp, robert_sharp@platts.com

For similar news, take a trial to Platts Petrochemical Report at
http://petrochemicalreport.platts.com.


 

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