US Energy Information Administration has reported a drop of 1% to 797,000 barrels a day in ethanol output capacity for the week ended 8 March 2013.

The output demonstrates 17% dip compared to highest output recorded in December 2013.

The demand for gasoline for the last four weeks averaged at highest since 28 December, besides registering 1.1% growth year-on-year.

Gasoline produced from ethanol catered to nearly 93% of total gasoline requirement for the week, down from 94% during the previous week, reported Bloomberg.

Meanwhile, denatured ethanol for April delivery grew 1.9% to $2.583 a gallon on the Chicago Board of Trade; in yearly terms, the prices rose by 18%.

According to EIA, the stockpiles witnessed consecutive drop for sixth week to 18.7 million barrels and it is reported to be the lowest since November 2012.

The drop in the production is attributed to the higher costs driven by Midwestern drought that parched corn crops and destroyed yields.