Ethanol futures fell the most in four weeks amid concerns that higher energy prices will curb economic growth, according to analysts.
The International Energy Agency and the International Monetary Fund said oil prices that have surged 25% in the past year will hurt the global economy. “The market’s got overextended,” said Mike Blackford, an analyst at INTL FCStone Group. “It’s enough to cause a bit of a washout this week. Demand is hand-to-mouth. People are only buying as needed.”
Denatured ethanol for May delivery dropped $0.07 (2.6%) to $2.66 a gallon on the Chicago Board of Trade, the largest decline since March 15 and the lowest price since March 31. Prices have risen 12% this year. In cash market trading, ethanol in the U.S. Gulf dropped $0.05 (1.8%) to $2.735 a gallon and in Chicago lost $0.035 (1.3%) to $2.66. Ethanol in New York fell $0.02 (0.7%) to $2.75 a gallon and on the West Coast decreased $0.035 (1.2%) to $2.805.