EIA slightly reduces forecasts for 2020, 2021 ethanol production

By Erin Voegele | June 09, 2020

The U.S. Energy Information Administration slightly reduced its forecasts for 2020 and 2021 ethanol production in its latest Short-Term Energy Outlook, which was released on June 9. Forecasts for ethanol consumption were also revised down.

The EIA currently predicts ethanol production will average 850,000 barrels per day during 2020, down from the 870,000-barrel-per-day prediction made by the agency in its May STEO. The EIA has also lowered its forecast for 2021 ethanol production to an average of 960,000 barrels per day, down from its prediction of 970,000 barrels per day made in May. Production in 2019 averaged 1.03 million barrels per day.

On a quarterly basis, the EIA predicts second quarter 2020 ethanol production will be at 670,000 barrels per day, down from 1.02 million barrels per day during the first quarter of the year. Ethanol production is expected to rebound to an average of 830,000 barrels per day in the third quarter and 920,000 barrels per day in the fourth quarter. In 2021, ethanol production is expected to average 920,000 barrels per day in the first quarter, 960,000 barrels per day in the second quarter, 970,000 barrels per day in the third quarter and 980,000 barrels per day in the fourth quarter.

Ethanol consumption is expected to average 800,000 barrels per day in 2020 and 880,000 barrels per day in 2021, down from an average of 950,000 barrels per day last year. In its May STEO, the EIA predicted that ethanol production would average 820,000 barrels per day in 2020 and 890,000 barrels per day in 2021.

Overall, the EIA currently expects gasoline consumption to be down 26 percent this year. Fuel consumption, however, seems to be rebounding as COVID-19-related lockdowns are relaxed. EIA estimates that the consumption of finished motor gasoline increased to 7.3 million barrels per day in May, up from 5.7 million barrels per day in April. The agency said personal travel numbers matched the trend of motor gasoline consumption. In its June STEO, the EIA cited data that showed that when compared to the last pre-lockdown week ending Feb. 29, weekly personal travel was down only 16 percent on May 29. It was down 47 percent on April 3.

The EIA’s most recent weekly ethanol data shows production averaged 765,000 barrels per day the week ending May 29, up from 724,000 barrels per day the previous week. Ethanol stocks fell to 22.476 million barrels the week ending May 29, down from 23.176 million barrels the previous week.

The agency’s most recent monthly data shows the U.S. imported 255,000 barrels of ethanol in March, all from Brazil. During the same month, the U.S. exported 3.337 million barrels of ethanol, primarily to Brazil, Canada, and India.