Tag: ARCHIVE

It was another rough week for Midstream overall, but MLPs held up better than broad midstream for a second straight week, and they also outperformed utilities.

Midstream had another week of underperformance. MLPs gave up last week’s modest gains and more.  The weakness had little to do with fundamentals. Oil prices rallied, and earnings results were strong overall, especially from ETP and Pembina.  The weakness came from reminders of persistent structural headwinds: complicated simplifications (EQM this week), and stubbornly high leverage driving distribution cuts (MIC this week).

MLPs finished positive for the week, but underperformed the rest of Midstream, the S&P 500, utilities, and oil prices. The broader energy infrastructure index (AMEI) traded better on the back of a strong week in Canadian Midstream and some of the larger U.S. Midstream Corporations.

More pain for midstream and MLP stocks this week.  The negative factors from last week remained, but oil prices piled on this week.  Oil prices are on a 6-day losing streak and broke below $60/bbl Friday.  Stocks were volatile, and midstream/MLPs held up ok on a relative basis and have been a decent place to hide the last few weeks if you avoided the biggest losers in the group.

In a rough week for stocks of all kinds, energy stocks and midstream/MLPs stood out as particularly weak.  The MLP Index declined 5.9%, including distributions, the first 5%+ decline week in nearly two years (since February 2016).  The 10-year treasury rate rose another 17 basis points, and sits just 17 more bps from 3.00%.  Oil prices held up well and propane prices were positive even as natural gas prices cratered.

Midstream stocks resumed their elevation this week, mostly keeping up with the torrid pace of the broad market.  The S&P 500 gained another 2.2% this week (although without much help from KMI -1.3%).  Oil and natural gas prices also shot higher, helped by falling inventories and a falling U.S. dollar.   The MLP Index has gained 10% already this year, far outpacing the broader midstream universe and ahead of the S&P 500.  Year-over-year, S&P 500 remains king, up 25% and accelerating in 2018.

Midstream stocks sold off this short week, taking a breather from their sprint off the bottom.  MLPs had traded up in each of the last 5 weeks, so a pause isn’t surprising.  The MLP Index traded down the first 3 days of the week, before a reversal and positive finish Friday.

MLPs had their best week since…last week, up each day this week for another 4.6% since last Friday.  It was a fifth straight positive week, the first such streak since April 2016.  The Index is now 19% higher than the end of November recent bottom.

It was a great opening week for midstream stocks, or almost any other kind of stock (ex-utilities and REITs). MLPs have traded up for 4 consecutive weeks, the first streak of 4+ positive weeks since April 2016.  4.5% is the best week for MLPs since late last January.  MLPs are also 13.9% off the late November bottom.  The MLP Index opened with consecutive 2%+ days for just the second time ever (2009 was the other time).