UPDATE 1-US ethanol output up for 4th month in January -EIA

Thu Apr 8, 2010 6:01pm BST

* U.S. ethanol output up 3.9 pct from December

* Supplies also rose as blending slipped (Adds blending and overall supply numbers)

WASHINGTON, April 8 (Reuters) - U.S. daily ethanol output rose in January for the fourth month in a row as distillers took advantage of relatively low prices for corn and natural gas, the Energy Information Administration said Thursday.

Monthly output of the alternative motor fuel rose about 3.9 percent in January to 818,260 barrels per day, the EIA said in its Petroleum Supply Monthly Report. January was the latest month for which data was available.

The January number was up from 787,870 bpd in December, and 786,400 bpd in November.

Most U.S. ethanol is made from corn starch, while natural gas fires most boilers at distilleries.

Motor fuel blenders and refiners mixed about 690,516 of ethanol into gasoline in January, down from 718,838 bpd in December. That helped push stocks up to about 17.8 million barrels in January, up about 6.5 percent from the previous month.

U.S. mandates call for increasing amounts of ethanol to be blended into gasoline to help reduce demand for foreign oil. The mandate for ethanol made from corn and other grains hits a maximum of 15 billion gallons a year by 2015. (Reporting by Timothy Gardner; Editing by Walter Bagley)