U.S. oil production in the first week of January was 7 million barrels per day, up 19% from a year ago, while ethanol production was down nearly 14% to 826,000 barrels per day, according to data from the Energy Information Administration. After strong returns in 2011, ethanol profit margins declined sharply in 2012, mainly due to the elimination of the Volumetric Ethanol Excise Tax Credit and reduced overall demand for gasoline, the data showed. Strong demand for distillers dried grains with solubles and corn oil helped boost margins for some ethanol producers, the data showed.

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