Ethanol futures gained the most in five weeks in Chicago on signs distillers will exercise production restraint to mitigate a glut.
Prices gained a day after the Energy Department said output last week fell to 892,000 barrels a day, the lowest level since Oct. 7, helping stockpiles snap a record 12-week streak of increases.
“You get the sense that production could fall even more as plants start spring maintenance,” said Jerrod Kitt, an analyst at Linn Group in Chicago.
Denatured ethanol for April delivery climbed 3.3 cents, or 1.4 percent, to $2.3337 a gallon on the Chicago Board of Trade, the biggest one-day gain since Feb. 6. Prices have gained 6.1 percent this year.
In cash market trading, ethanol on the West Coast rose 1.5 cents, or 0.6 percent, to $2.425 a gallon and in the U.S. Gulf the additive lost 2 cents, or 0.9 percent, to $2.325, according to data compiled by Bloomberg.
Ethanol in Chicago slipped 1.5 cents, or 0.7 percent, to $2.27 a gallon and in New York the biofuel slid 0.5 cent to $2.35.
The biofuel is blended with gasoline as part of U.S. energy plans to reduce dependence on fossil fuels, such as crude oil.
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