Stock Tickers: PEIX, VSE, XNL, ADM, CLNE, ANDE, USBE, AVR

With oil prices remaining high, with politicians noting ethanol ahead of the Iowa caucus, and with OPEC threatening no new development and exploration if we keep pushing toward more and more biofuels, it was pretty amazing to see some of the ethanol stocks within spitting distance of their 52-week lows:

Pacific Ethanol, Inc. (PEIX) $12.90, 52-week low $12.50 (OCT 2006)
Verasun Energy Corp. (VSE) $14.91, 52-week low $14.36 (yesterday)
Xethanol (XNL) $1.35, 52-week low $1.24 (MAY 2007)

Andersons Inc. (ANDE) is not in the boat, with shares at $39.28 and its 52-week low is $31.05.  US BioEnergy (USBE) is trading at $12.07, above its $10.78 lows over the last 52-weeks.  Aventine Renewable Energy (AVR) is up on the day close to 2% at $17.16, up from its $14.60 low over the last 52-weeks.

Archer Daniels Midland (ADM) is no longer doing its major alternative energy swings and its shares sit down 1.1% at $33.71, with its 52-week lows at $30.20 (JAN 2007).  The recent IPO Clean Energy Fuels (CLNE) from T. Boone Pickens might be an ultimate indicator of demand for these shares right now (although, that isn’t ethanol).

If OPEC is out raising cain against biofuels, it has to make any sensible person wonder how much of a shortage there really is.  It is true thatthere is actually not a net shortage, but capacity is supposedly maxxed and storm season and summer is always a serious concern to energy prices.  But this first sabre rattling out of OPEC essentially against biofuels has to be yet another indicator that biofuels are starting to actually be noticed in downstream shipments by the OPEC nations.

Jon C. Ogg
June 7, 2007 

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.

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