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Senior Advisor

From the Weekly Petroleum Status Report, Gasoline and Ethanol.

From the 4/8/2020 Weekly Petroleum Status report, finished gasoline supplied 5,825 thousand barrels per day, down 42.5% from a year ago.  Ethanol production, 672 thousand barrels per day, down 32.9% from last year.

 

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Honored Advisor

Re: From the Weekly Petroleum Status Report, Gasoline and Ethanol.

I saw gas price at Fleet Farm was $1.10 after a 4¢ coupon, you can`t produce E-85 for that even if they bought corn for $2.50.  R.I.P Ethanol.  See all this hand wringing a few months ago about "RiN waivers" was a drop in the bucket.

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Senior Advisor

Re: Can't make ethanol this cheap, so what?

Can't make ethanol this cheap, so what? Ethanol futures are $.84/gal, RBOB is $0.79 and has been as low as $0.60, just how much shale oil gets produced with crude at $26.00 per barrel ($0.62/gal)?

  Watch what happens to the drill count in ND at $30/barrel.  So farmers can't grow and sell their corn, the big oil companies can produce and sell their oil, either.  The question becomes, who goes broke first?

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Senior Advisor

Re: Can't make ethanol this cheap, so what?

Big oil operates mostly downstream and I suppose they’re being hurt by reduced volumes.

The junk bond drillers are more like farmers here- price takers with a pretty inflexible cost structure.

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