Latest EIA STEO report revises 2014 ethanol production forecast

By Erin Voegele | September 12, 2013

The U.S. Energy Information Administration has released the September issue of its Short-Term Energy Outlook, forecasting that the U.S. ethanol industry will produce an average of 890,000 barrels per day in 2014, down slightly from the forecast made by EIA the previous month. In the STEO, the EIA noted that its current estimates assume the 2014 renewable fuel standard (RFS) volumes will be identical to those recently finalized by the U.S. EPA for 2013, which equates to 16.55 billion ethanol-equivalent gallons of renewable fuels. 

According to the EIA, last year’s drought reducing ethanol production from an average of approximately 900,000 barrels per day during the first half of 2012 to only 820,000 barrels per day from July 2012 through March of this year.

In the August issue of its STEO, the EIA forecasted that ethanol production would average 920,000 barrels per day. The new STEO for September reduces that production forecast by approximately 3.2 percent or 30,000 barrels per day, reaching only to 890,000 barrels per day.  The production forecast for 2103 has also been reduced by 1.8 percent, from 870,000 barrels per day in the August STEO to 860,000 barrels per day in the September issue. The overall growth rate in ethanol production for 2013-2014 is now estimated to be 4.1 percent.

Broken down on a quarterly basis, the EIA data projects ethanol production will average 860,000 barrels per day during the third quarter of this year, increasing to 880,000 barrels per day in the fourth quarter. During the first quarter of 2014, production is expected to reach an average of 890,000 barrel per day, before increasing to 900,000 barrels per day in the second quarter. During the third quarter of next year, the EIA forecasts ethanol production will drop to 890,000 barrels per day, where it will remain through the fourth quarter.

Regarding petroleum prices, the STEO notes that monthly average crude oil prices increased for the fourth consecutive month in August. The Brent crude oil price is expected to average $109 per barrel during the second half of 2013, up $5 from last month’s estimate. The price is expected to drop to $102 per barrel next year, a price $2 higher than the EIA projected in its August STEO.

Gasoline prices are expected to average $3.44 per gallon during the fourth quarter of 2013, up 11 cents from last month. The average price for gasoline is expected to be $3.43 per gallon in 2014, down from $3.55 per gallon in 2013.