First Look - Mountain Valley Pipeline adjusts its targeted in-service date to early June

Oil is trading higher, around $78.45, after losing more than $1 yesterday
- Oil prices moved lower yesterday following commentary by the Federal Reserve implying interest rates may remain higher for longer, leading to strength in the U.S. dollar
- Following yesterday's EIA inventory report, US crude storage levels are about 3% below the five-year average
- It was reported that Russian crude production for April has exceeded the OPEC+ quota due to “technical reasons”
Shrinking refining margins in China impact trade of Russian oil (BBG)
- China is on track to import the lowest volume of Russian ESPO crude since 2021, as refining margins have weakened, and other grades of oil are cheaper
- Earlier this year, independent refiners in China had been buying large volumes of ESPO amid a dispute with Iran that resulted in lower volumes of Iranian crude
- Weak margins may force some refiners to cut their throughput rates
- According to a note from Mysteel Oilchem, independent refiners may operate at 52% of capacity in June, the lowest since May 2022

Natural gas prices trade higher ahead of the storage report
- June ’24 Henry Hub is up 2.1c this morning to trade around $2.863/MMBtu
- The Summer ’24 strip is up 5.9c to $3.036 and Winter ‘24/’25 strip is up 5.2c to $3.700
- Today’s Euro Ensemble indicates a moderate increase in average temperatures across the Lower 48, although they remain below the 10-year average, with early June expected to be warmer (Criterion)
Mountain Valley Pipeline is adjusting its targeted in-service date to early June (S&P Global)
- The targeted in-service date was shifted to early June due to the extended construction duration for weld-out, influenced by weather and environmental protection
- The 2 Bcf/d pipeline had initially requested FERC authorization for an in-service date by May 23 to be operational before June 1
- As of May 21, Mountain Valley Pipeline reported that fewer than 10 welds out of over 51,000 were remaining, with hydro testing 99% done and all compressor stations commissioned and packed with gas