U.S. ethanol production climbed 2 percent to 913,000 barrels a day last week, the highest level in two months, according to the Energy Department.
Output rose to the highest level since Jan. 21 and the gain was the largest since Jan. 14, the department said in a report released in Washington. Stockpiles grew 0.7 percent to a record 20 million barrels.
Production of conventional gasoline blended with ethanol gained 0.9 percent to 4.95 million barrels a day. Refiners receive a 45-cent tax credit for every gallon of ethanol blended into the motor fuel.
Denatured ethanol for March delivery slumped 0.8 cent, or 0.3 percent, to $2.48 a gallon at 10:35 a.m. New York time on the Chicago Board of Trade. Futures have climbed 59 percent in the past year.