Month: June 2018

Midstream and MLPs traded well this week, but not as well as you’d expect given a 5%+ oil move and strength in income securities (like utilities).  The OPEC meeting Friday turned out to be a catalyst despite no surprise, because of how well-managed expectations were.  Oil, energy stocks and MLPs were sharply higher Friday, and the Dow finished positive for the first time in 9 days.

The week started strong, with MLPs up 1.6% Monday, but then followed up with 4 straight negative days, culminating in a big Friday selloff (-2.6%). Friday was the MLP Index’s worst day since March 19th, just a few days after the FERC ruling. It was also the worst week for the index since that same week in March. Unlike that week, there wasn’t any big midstream news that led to the drop. The action this week was more related to the macro (i.e. China tariffs, the Fed, oil prices and positioning ahead of OPEC).

Midstream corporations and MLPs finished roughly where they started this week. But along the way, on Thursday, both AMZ and AMEI reached their highest levels since mid-February. The gains through Thursday slipped away Friday and the MLP Index closed back at its 200-day moving average. Midstream held up in a bad week (within a bad year) for income securities like utilities.

Midstream and MLPs synched up this week to rally 2.7%, outperforming the S&P 500 and utilities, despite renewed oil price angst this week.  Midstream stocks and MLPs resumed their recovery after last week’s pause, and have now posted gains in 7 of the last 10 weeks.  After bottoming in late March, the AMZ and AMEI have posted total returns of 16.2% and 12.3%, respectively. The rally has helped the MLP Index break back into positive territory year-to-date, and the MLP Index closed the week almost exactly at its 200 day moving average (269.7).