Author: Hinds

The one-year anniversary of the FERC policy statement for MLPs was last week.  While MLPs stock prices recovered from the initial negative price reaction to the FERC ruling last year, the lasting impact of that announcement continues to play out today, and the ripples of that announcement may impact performance going forward.

Midstream and MLPs finished the week negative overall, but rallied Friday on a negative day for oil prices to nearly salvage the week, which was encouraging in light of largely negative news across the sector this week.

Midstream and MLPs finished the week negative overall, but rallied Friday on a negative day for oil prices to nearly salvage the week, which was encouraging in light of largely negative news across the sector this week.

Midstream and MLPs finished the week negative overall, but rallied Friday on a negative day for oil prices to nearly salvage the week, which was encouraging in light of largely negative news across the sector this week.

Midstream was slightly positive and MLPs were slightly negative in this short trading week. Canadian Midstream helped AMNA outperform AMZ and AMUS this week. AMNA is approaching 20% YTD return. Oil prices rallied again, marching back towards $60/bbl, so did natural gas and NGLs. But that wasn’t enough to get U.S. midstream moving higher. It may be cognitive bias, but it feels like whenever MLP correlation with oil prices breaks down, its because MLPs are underperforming, not outperforming.

After a pit stop to scoop up some distributions last week, midstream stocks resumed their rally with another big week.  It was a big week across the energy sector, buoyed by oil the highest oil prices of the year and a big week for the stock market broadly.

January enthusiasm gave way to profit taking and dividend capture for midstream this week. Commodity prices were negative, which may have been the catalyst for that shift.  Canada and US midstream corporations held up better than MLPs, opening up an even wider YTD and YOY performance gap for the AMNA vs AMZ.

As noted in my last mid-week post, in 2019, nothing will change with regards to the timely weekly write-ups you all love.  Occasionally, however, I will sprinkle in a mid-week post that might include promotional language related to my day job at CBRE Clarion.  As a reminder, in addition to providing weekly free midstream blog, I manage a midstream investment strategy and I contribute to the global team that manages an infrastructure investment strategy on behalf of paying clients.

Midstream had another strong week, outpacing the S&P 500 with a 2.9% total return, although MLPs underperformed broader midstream.   Tailwinds from higher oil prices, Exxon’s strong results, support for income securities in the broad market helped midstream this week.

It was a quiet week across the market.  Midstream, MLPs, utilities, the S&P 500 and oil prices were all plus or minus less than 1%.  Midstream earnings season re-starts this week after a pause for the KMI analyst day last week.  EPD, MMP, TGE and a few others report 4Q results late in the week.  Expectations have come down with lower commodity prices since 3Q results, but Midstream results should still show progress on cash flow growth, self-funding and de-leveraging initiatives.