A method for producing a fuel or fuel additive comprising providing a reaction mixture comprising oil and an alcohol in an oil-in-alcohol emulsion and a catalyst for converting the oil to the fuel or the fuel additive. The oil and the alcohol are reacted in the presence of the catalyst, at a concentration below that used in a conventional batch process, to produce the fuel or fuel additive. This low level of catalyst reduces the formation of diols and oxidation products that can diminish the quality of the fuel or fuel additive. The fuel or fuel additive produced is continuously removed during the reaction, effectively de-coupling the concentration of catalyst used from the rate of the two phase reaction.