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regular gas and e85 at same price. Is this a problem?
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farmer4321
Posted 11/26/2018 09:04 (#7128401 - in reply to #7128189)
Subject: RE: The price of E85 is just one more symptom of the problem.


I really don't mean to be political but, never has there been a clearer case where government policy has created a situation. The current low price of ethanol can traced directly back to Pruitt's policy of granting unnecessary RINS waivers and trump's trade policy leading to the shutdown of ethanol exports to China. One of the consequences of the low price & demand for ethanol has been the ethanol producers announcements to curtail production, reduced corn grind and downward pressure on the price of corn.
Meanwhile, the trump administration's trade war with China has triggered a global economic slowdown (don't believe me, just read what the big banks are all saying and take a look at the stock market). This slowdown is, and will lead directly to a decline in petroleum demand. Since E10 is still by far the biggest use of ethanol, this decline in gasoline use will lead to a decline in demand for ethanol.
And finally, the trump administration's re-imposition of sanctions on Iran caused the Russians & Saudis, among others to increase oil production in anticipation of the decline in Iranian oil production. The trump administration's waivers on Iranian oil granted to China, India & Turkey very effectively preempted the planned demand. And let's not forget the recent ramp up in shale oil production as well and the curtailment of US gasoline exports to China as well.
As far as the price of oil goes, I not worried about that, the Saudis & the shale oil drillers will shut in production and the price of gasoline will rebound soon enough.
But the decline in the global and US economy will be with us for a while, as will the reduced ethanol production as will reduced corn demand.
And then there's always that 94-95 million acres of corn to look forward to next spring. Who said things can't get worse.
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