Ethanol production in the U.S. dropped the most on record last week as a historic cold snap prompted some plants to slow or completely shut down amid power outages and a spike in natural gas prices.
Output slid 28% to 658,000 barrels a day, according to the Department of Energy. The decline was the biggest in figures going back to 2010, according to data compiled by Bloomberg. Production was also below the average estimate of 819,000 in Bloomberg survey of analysts.
A brutal cold snap in the central U.S., home to the bulk of the country’s ethanol production, caused some plants to lose electricity and others to slow down or temporarily stop operations to conserve energy as natural gas prices soared. Some makers of the corn-based biofuel pulled back output as much as 60%, Renewable Fuels Association President Geoff Cooper said last week.
Cooper said in an email on Wednesday that it could be another week before most plants are ramped back up to pre-deep-freeze levels of output, as producers deal with the various gas, electricity, and rail disruptions.
Output last week was 38% below the same period a year earlier, and the smallest since early May, shortly after initial stay-at-home orders amid the coronavirus outbreak dramatically cut demand for motor fuel. Stockpiles for the week fell 6.2%.
