CHICAGO — U.S. ethanol prices declined for the fourth consecutive week, reaching their lowest in six weeks, as a plunge in crude oil eroded costs for gasoline.

Lower gasoline prices in recent weeks has reduced the incentive to blend more ethanol, even with a federal tax break to encourage use of the grain-based fuel, said John Litterio, marketing director for Provista Renewable Fuels in Inver Grove Heights, Minn.

Crude futures fell to a 19-month low this week in New York as an unusually warm U.S. winter curbed heating-fuel demand. Currently, ethanol is blended into about two-fifths of U.S. gasoline at concentrations as high as 10 percent.

(Since April 2006, Hawai'i has required that most gasoline sold in the Islands contain at least 10 percent ethanol.)

"The price of ethanol has to be in line with some profitability for the blender," Litterio said. "How long can it stay at levels higher than the federal tax credit above gasoline is a real question mark."

Ethanol averaged $2.2375 a gallon yesterday, down 7.1 percent from $2.4098 Jan. 5 and the lowest price since $2.2315 Dec. 1.

The latest price, down from a record $3.9757 a gallon on July 3, is still up 20 percent from $1.8664 a year ago.

The U.S. indirectly subsidizes its domestic ethanol industry by giving fuel makers a 51-cent tax break for each gallon of the additive blended with gasoline.

Gasoline futures, which reflect wholesale prices, settled yesterday at $1.432 a gallon on the New York Mercantile Exchange, down 11 percent this year. That left U.S. ethanol about 81 cents above gasoline.

"We have not seen any significant reduction in ethanol blending," Litterio said. "But experience shows that the ethanol-to-gasoline spread needs to make economic sense to the blender."

Crude oil yesterday rose $1.09 to $52.97 a barrel in New York after earlier falling to $51.56, the lowest since May 2005.

In addition to sliding gasoline prices, U.S. ethanol producers are facing rising costs for corn, which soared to the highest in more than 10 years today in Chicago. Most ethanol in the U.S. is made from corn.

The corn rally is getting "problematic" for the ethanol industry as producer margins shrink, said Litterio, whose company is a joint venture partly controlled by Brookings, South Dakota- based ethanol producer US BioEnergy Corp.

"The ethanol plants, it still looks like they're making money today," Litterio said. "But it's really getting to be a pinch point. That margin is really going to get to be squeezed here if this continues. We're tending toward break-even at these levels."

Corn comprised about 45 percent to 50 percent of the fourth-quarrter production cost for U.S. ethanol makers, according to Credit Suisse analysts.

On the Chicago Board of Trade, corn futures for March delivery rose the exchange limit of 20 cents to $3.965 a bushel, the highest since July 1996.