US Bioenergy, an ethanol producer that IPO'ed last December has announced a very successful Q4 - sales were up 10 times on Q4 2005 and it was also a profitable quarter.

This should all be very encouraging except that US Bioenergy is trading below its IPO price of 14, while the price of oil has crept back up to $65. Investors may have fallen out of love with ethanol, but it does appear that there is not a great deal of correlation between the price of oil and the price of ethanol stocks. Instead ethanol stocks have been much more affected - as per this concise article on Motley Fool to;

i) the uncertainty surrounding future demand for ethanol
ii) the risk of higher corn prices
iii) concerns over long-term profitability for the major players in the market.

Ultimately, the greatest failing of conventional first generation ethanol technology is one of scale. It has been estimated that the absolute that can be produced today from ethanol - if everyone pulls out all the stops - is 5 million barrels a day. That's just not enough to make any serious impact on global consumption of approx 86 m barrels a day, still rising at 1 - 1.5 m barrels a year.