EIA updates ethanol production forecasts in short-term outlook

By Erin Voegele | April 08, 2015

The U.S. Energy Information Administration has released the April edition of its Short-Term Energy Outlook, revising its ethanol production forecasts for this year and next year.

The EIA noted ethanol production in December topped 1 million barrels per day for the first time, before falling to an average of 944,000 barrels per day in March. The EIA currently estimates ethanol production will average 944,000 barrels per day this year, up from 935,000 barrels per day in 2014. The new 2015 forecast is down slightly when compared to the 947,000 barrel per day forecast made in the March STEO. Next year, the EIA expects ethanol production to fall slightly, averaging 937,000 barrels per day. In the March STEO, the EIA forecast production would average 942,000 barrels per day in 2016.

Biodiesel production averaged 83,000 barrels per day in 2014 and is currently forecast to average 82,000 barrels per day this year and 84,000 barrels per day next year.

During the summer driving season, which spans from April through September, the EIA projects motor gasoline consumption will average 9.2 million barrels per day, a 1.6 percent increase from last summer. The 2.5 percent year-over-year increase in summer highway travel is expected to be offset by a 0.9 percent increase in fleetwide fuel efficiency. Fuel ethanol blending into gasoline is expected to decrease by 100,000 barrels per day from last summer’s level to 880,000 barrels per day. According to the EIA, that level equates to approximately 9.6 percent of total gasoline consumption.

Gasoline retail prices are expected to average $2.45 per gallon during the summer driving season, down from $3.59 per gallon last year. According to the EIA, the average U.S. household is now expected to spend about $700 less on gasoline this year than last year, with annual motor fuel expenditures on track to fall to their lowest level in 11 years.

According to the EIA’s most recent weekly data, U.S. ethanol production averaged 936,000 barrels per day the week ending April 3, down from 952,000 barrels per day the prior week.

EIA data also shows the U.S. exported 1.637 million barrels of ethanol in January. Only 7,000 barrels of ethanol was imported during the month.