A variety of plant resources jointly referred to as “biomass” is made into a renewable fuel called Ethanol. Over 95% of U.S. gasoline contains ethanol, normally E10 (10% ethanol, 90% gasoline), to reduce air pollution and oxygenate the fuel. (Ethanol Fuel Basics, 2014) Ethanol is a clean burning, high-octane, high-performance fuel that reduces carbon monoxide and hydrocarbon tailpipe emissions. (KAAPA Ethanol, 2015) The return on an ethanol stock is greater than return on an oil stock because the price of oil is in a recession. Ethanol can be accessed as E85, or high-level ethanol blends. In flexible fuel vehicles, the fuel can be used, which can run on high-level ethanol blends, gasoline, or any combination of these. (Ethanol Fuel Basics, …show more content…
(Topf, 2014) As the prices of oil and gasoline have taken a dive, so has ethanol, taking ethanol equities down with it. While this news may seem like a good time to hit the sell button for your ethanol stock, you better think twice about it. Ethanol stocks are expected to make a comeback and here's why. Ethanol is widely used as a fuel additive in Brazil and the United States, ethanol production has grown exponentially, largely due to government incentives and regulations that mandate a continued increase in the amounts of ethanol fuel required to be blended with gasoline. (Topf, 2014) Why do we want to buy stock in ethanol? The easy answer: exports. With U.S. ethanol producers facing increasing issues, including the abolition in 2011 of the blenders' credit that provided them over $45 billion in cash since 1980, they have looked somewhere else to sell their fuel. In 2014 U.S. ethanol exports increased 31 percent, their highest level since 2011, reaching 79.2 million gallons in October. Countries like the Philippines and Japan will be future buyers to the ethanol because they are resource-deficient and use ethanol to widen their gasoline requirements. …show more content…
ethanol producer, exported about 15 percent of its production in the fourth quarter, with volumes sold and destined for India, the Philippines, Brazil and Canada.(Topf, 2014) The third quarter of 2015 is when the corporation will be booking sales. “We typically have not seen export interests that far out in the future,” CEO Todd Becker said in a conference call on Oct. 29. Dropping ethanol prices, ethanol futures have lost 17 percent in the last month. It would take a courageous investor to buy them now, but the market essentials for ethanol appear sturdy, and help the producers. Obviously, as gasoline prices drop, demand for gas, and therefore ethanol, is bound to increase. (Topf,