Ethanol rush running out of gas

Alternative energy’s latest craze is losing support on Wall Street.

NEW YORK (CNNMoney.com) — Ethanol producer Hawkeye Holdings postponed its initial public offering this week, the latest setback for makers of the alternative fuel and a sign more tough times may be ahead.

As crude prices spiked to record highs earlier this year, ethanol was cast into the spotlight. But now that oil prices are falling, ethanol producers are hurting. The front-month crude contract is trading near a six-month low at around $61 a barrel and is down nearly 21 percent from the record closing price set in July.

Shares of VeraSun (Charts), the No. 2 producer, have plummeted 26 percent since it went public in June. The stock price of Aventine Renewables (Charts), meanwhile, has slumped by half since it went public.

Ethanol IPOs generated plenty of buzz in the summer, when soaring oil and gas prices kept investors on edge, although some analysts warned about the dangers of getting in on the craze.

CNN/Money