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dan45mcc

Yellow is fading.. Price spreads narrowing

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it has been pretty sad here...

 

gas down, and ethanol up!

 

I had gas prices drop 20 cents in a week, and e85 prices rise 20 cents in 2 days at the same time. A swing like that will totally wreck the spreads in a big hurry. I had a conversation with a guy filling his Yukon SUV at the pump. He was lamenting that "it is almost not worth it"... I responded "well, the way I look at it, when it comes to supporting Nebraska farmers, and American jobs over terrorist funding foreigners and Wall Street investors... I find it hard to justify not using e85!"

 

He stated "well, you make a good point, you're probably right."

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When I filled up this weekend, I was rather disappointed that E10 had dropped practically 20 cents, and E-85 had gone up a dime.   

 

The price for both fuels is amazing (that's good), but the price spread isn't anywhere where I would hope it would be.    I am sure the Ethanol Producers are really feeling the squeeze right now.

 

WM

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When I filled up this weekend, I was rather disappointed that E10 had dropped practically 20 cents, and E-85 had gone up a dime.   

 

The price for both fuels is amazing (that's good), but the price spread isn't anywhere where I would hope it would be.    I am sure the Ethanol Producers are really feeling the squeeze right now.

 

WM

And this is why...

 

 

 

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post-2-0-47719300-1416844368_thumb.png

 

Just going to be  along winter

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I think one of the reasons that crude, thus gasoline, is down is to punish Russia. What I can't figure out is how the gov't can get the trade to do that. If crude keeps going down Russia will be in a world of hurt. Kind of reminds me how cash corn around here got up to $8 a bushel and a month or so ago it was down to $2.75. I got $3.70 at the ethanol plant last week.

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So here are a couple theories I have that I would like to float.

 

As far as the ethanol price, the first thing that comes to mind is the corn price. As far as I can tell, truck traffic at the ethanol plant is significantly lower than it normally is this time of year. I've also noticed a lot more corn still unharvested than I usually do this far into the fall season. The problem is that corn fell below $4/bushel, and kept going down, down, down, into the ring of fire for a while. It has since gone up in price, dragging the price of ethanol wih it.

 

As for gasoline, the predominant theory that I've heard is that the Saudi Arabian government, or OPEC, are releasing additional oil onto the world market to lower the price of oil. Why? Fracking and tar sands, both controversial methods of extracting oil from land areas in North America outside of the Gulf of Mexico and Alaska, are only profitable when oil prices are high. That's why tar sands has only recently become a significant part of our oil supply. The theory is that the Saudis are releasing oil onto the market to lower the price and make fracking and tar sands less profitable.

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I've wondered how much of this drop in price is helping them in multiple ways and nobody else has picked up on it yet. Not only does this hurt shale and tar sands profits, but it has the potential to hurt alternative fuel (like Ethanol), hybrids, and pure electric vehicle sales too. After why, why use E85 when gas this cheap, or why spend extra to buy a natural gas, hybrid, electric vehicle or even a higher mileage gas cars for the same reasons.

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