The balance between supply and demand of MLP paper has always been delicate. In the past it was a balance between perpetually growing inflows and equity issuance. There were times when equity offerings temporarily overwhelmed investor appetite for MLPs. But as liquidity has diminished in recent years, the structural risks to this group to a stampede to the exits grew larger.
Author: Hinds
Week Thoughts: Market Suspended, MLPs Canceled
What a week. The oil price collapse dragged MLPs and midstream stocks down again this week. The group finished down a staggering 30%, which leaves YTD returns in less than 3 months at negative 40-50%.
Week Thoughts: From Russia, No Love for Midstream
Midstream captured more downside, selling off again this week but for a different reason. Last week, midstream was down alongside the rest of the stock market. This week the market finished flat, utilities finished sharply higher with a big interest rate drop, but midstream sold off again.
Midstream Week Thoughts: Selling Goes Viral
Midstream joined in on the biggest and broadest equity selloff in recent memory this week. This was the worst week for the S&P 500 and for MLPs since 2008. Oil dropped to the mid-$40s, interest rates and natural gas prices dropped to fresh lows.
Week Thoughts: MLP Erosion Resumes
Stocks of all types were negative this short week (even utilities, barely), so despite a rally in commodity prices and a further drop in interest rates, midstream stocks were negative. MLPs were down for a 4th week in the last 5 weeks and were again the worst performing group in midstream.
Week Thoughts: Midstream Positive, Beyond Partnerships (BP)
On the back of rebounding oil prices and an ever-higher stock market, midstream indexes were positive this week. In a familiar refrain, the broader AMNA index was well ahead of the MLP Index, reflecting better performance among corporations
Week Thoughts: Midstream Reprieve
MLPs and midstream companies arrested their recent decline this week with a flattish week. The broad equity market had a strong week, helped by gains from some big tech firms on earnings results.
Week Thoughts: Somber Midstream, Market Mentality
Midstream was negative this week, along with most other global equities and commodities. Midstream outperformed broader energy stocks, but underperformed the S&P 500 and utilities, which continue to grind higher.
Week Thoughts: Market Seeks Shelter, Not MLPs
MLPs and midstream came back to earth this week, dragged down by oil and natural gas prices that were too weak to be ignored by midstream investors after 6 weeks of gains.
Week Thoughts: Midstream Phase Won
Midstream gains kept rolling for a sixth straight week, again riding a strong broad equity market higher, and defying weakness in upstream energy stocks (XOP -3.6%).