Midstream outpaced the broad market and posted a fourth straight positive week. MLPs again led the way, with a 1.5% gain. The MLP Index is up 4.7% over those 4 weeks. The Alerian Midstream Energy Index (AMNA), the most inclusive midstream index, was up 0.9% and has posted a year over year total return of 0.1%, slightly ahead the Alerian MLP Index.
Week Thoughts: OMG! FERC TBT 4 MLPs
Midstream stocks, led by MLPs, were positive for a third straight week. After starting slow, things turned around Wednesday when oil reversed intra-day. Then Thursday, the MLP Index rallied 2.5% after the final FERC ruling generated big excitement around some beaten down FERC-impacted and some additional excitement for MLPs broadly.
Week Thoughts: MLPs Green with Anticipation
Midstream had a decent week, highlighted by the MLP Index outperforming U.S. and Canadian midstream corporations and breaking back into positive total return territory year to date. MLPs traded up despite weakness in commodity prices and in utilities. On Monday, in particular, MLP action was encouraging when the UTY was drubbed for a 3% loss and the MLP Index was positive.
Week Thoughts: Delayed Fuse
In a rising broad market and a mixed commodity price backdrop, midstream stocks traded up but lagged the S&P 500 and utilities this week. Recent midstream corporation and utility outperformance has helped the Alerian Energy Infrastructure Index (AMEI) cut into the YTD lead the Alerian MLP Index has maintained since the MLP spike in January.
Week Thoughts: Red, White, Midstream Blues
Midstream had a disappointing week overall. Like last week, oil prices ramped up (albeit with strong backwardation) and MLPs under-performed broader energy stocks and utilities. The AMZ tracked the S&P 500 with a 1.4% decline, while the AMEI outperformed due to its exposure to Canadian midstream and utilities. Broader stock market weakness was likely a factor, along with the MLP Index re-balance and some capital markets activity in a generally thin midstream equity market these days.
First Half Midstream Returns: Factor Debrief
We are officially finished with a pretty wild first half of the year. As such, I thought it appropriate to break down midstream returns based on several different factors that I believe have been driving relative performance within the sector this year.
Week Thoughts: Midstream Eases Higher
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.
Week Thoughts: Low Energy MLPs
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).
Week Thoughts: Market Considers Pardon for Midstream
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.
Week Thoughts: Differentiated Performance
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).