First Look: Mountain Valley Pipeline requests to start commercial service in May
April 23, 2024
Oil is lower, near $81.40, as prices continue to sell off
WTI prices are down more than 7% or nearly $7/Bbl from its recent peak at the start of the month
Market participants expect sanctions to have a muted impact on Iranian exports (BBG)
Legislation pushed by the Biden administration to widen the scope of sanctions on Iran is expected to become law as early as next week, but many market observers do not expect strong enforcement
The White House may be hesitant to implement policies that could lead to higher prices in energy ahead of the 2024 election in November
A managing director at Capital Alpha Partners, a Washington-based research firm, said, “Oil traders are nonchalant because they know Biden will certainly sign whatever waivers are necessary to keep Iranian oil flowing into the market just as he has done with Russian barrels flowing into the market”
Clearview Energy Partners see the sanctions adding an $8.40/Bbl premium to oil prices if they are fully implemented and enforced
Russian crude exports remain high as refineries recover from attacks (BBG)
Seaborne crude exports from Russia have maintained a multi-month high as the country’s refineries struggle to bring capacity back online following Ukrainian drone attacks
Refinery throughput is the lowest since last year, encouraging higher exports
Natural gas prices trade lower as looming storage surplus counters upside from lower production and increases in LNG feedgas demand
May ’24 Henry Hub is down 0.3c this morning to trade around $1.788/MMBtu
The Summer ’24 strip is down 0.9c to $2.291 and Winter ‘24/’25 strip is up 0.7c to $3.439
Today's Euro Ensemble indicates a notable 21o F drop in the Midwest, moderate cooling in other regions except for warming in the Rockies, with early May temperatures expected to remain close to the ten-year normal
Gas flow to Freeport LNG is set to rise to 0.6 Bcf/d, compared to an average of 0.1 Bcf/d last week, amidst ongoing inspections and repairs on two of its three liquefaction trains
Mountain Valley Pipeline requests to start commercial service in May (Criterion)
Mountain Valley Pipeline (MVP) has submitted a request to FERC to start commercial operations by May 23, 2024
MVP is set to transport natural gas from Appalachia to Transco at Station 165 in Pittsylvania County, Virginia, targeting markets in the Mid- and South-Atlantic regions
The pipeline will provide 2 Bcf/d in firm transport capacity, facilitating increased gas supply to these areas
Robust natural gas storage in the Mountain region drives down Rockies prices (NGI)
Rockies natural gas cash prices plummeted from $3.00/MMBtu in December to $1.235/MMBtu last week amid strong production and low winter demand, resulting in significantly oversupplied storage levels
According to the EIA, gas storage in the Mountain region is 86% above the five-year average, with current levels nearly double those of 2023, highlighting a pronounced surplus relative to other U.S. regions
Although the Mountain region storage capacity is smaller compared to other areas, the large surplus is notable, with the Rockies experiencing a brief price spike in mid-January due to weather-related disruptions
With low prices, market participants are motivated to buy and store gas, anticipating higher prices from summer demand and new LNG facilities coming online later this year and next
Get market insights delivered to your Inbox every day!
