The U.S. Energy Information Administration has released the May issue of its Short-Term Energy Outlook, noting that ethanol production levels showed improvement in April. Production averaged 900,000 barrels per day during the first half of 2012. It dropped to an average of 820,000 barrels per day from July 2012 through March 2013. In April, production numbers improved, reaching an average of 840,000 barrels per day, which the EIA attributes to renewable fuel standard (RFS) targets and strong demand for renewable identification numbers (RINs).
According to the EIA, ethanol production is expected to remain near the current level of 840,000 barrels per day through mid-year, before recovering to pre-drought levels. The administration predicts that ethanol production will average 860,000 barrels per day in 2013. In 2014, production is currently expected to increase to an average of 930,000 barrels per day.
The STEO also addresses the recent price spike in RINs. After reaching a high of $1.05 on March 11, RIN prices dropped, averaging 70 cents in April. The EIA said that higher RIN prices should impact the market in two ways. First, it should lower the price of E85 relative to that of E10, simulating E85 sales. In addition, ethanol RIN prices that are equal to, or near, biodiesel RIN prices may increase biodiesel blending.
Regarding summer gasoline prices, the EIA said it expects regular gasoline to average $3.53 per gallon from April through September, which is a 10 cent reduction from the price estimate included in the April STEO. For all of 2013, gasoline prices are expected to average $3.50 per gallon, before declining to an average of $3.39 per gallon in 2014.
EIA&rsquo;s weekly ethanol production numbers show that production dropped slightly to an average of 843,000 barrels per day the week of May 3, from an average of 857,000 barrels per day the week prior.&nbsp;
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The U.S. Energy Information Administration has released the May issue of its Short-Term Energy Outlook, noting that ethanol production levels showed improvement in April. Production is expected to remain near the current level through mid-year. 

EIA: Ethanol production increased in April

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