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Weekly Wrap-Up: MLPs Rose for the Third Straight Week

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Weekly Wrap-Up: MLPs Rose for the Third Straight Week PART 1 OF 3

MLPs Gained Last Week on Supportive Crude Oil Prices

MLPs up 2%

The benchmark index for energy MLPs—the Alerian MLP Index (^AMZ)—was up 1.9% for the week ended July 14, 2017. This was the third positive week for MLPs in a row. MLP prices were supported by crude oil prices. The NYMEX near-month crude oil futures price was up 5.2% last week. Will the gains in crude oil prices sustain? Read Will the Crude Oil Futures Rally Be Short-Lived? and Memo to Energy Investors—Watch for Rising Crude Oil Production to learn about factors that may affect crude oil prices in the near term.

MLPs Gained Last Week on Supportive Crude Oil Prices

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As the above graph shows, MLP heavyweights Enterprise Products Partners (EPD), Plains All American Pipeline (PAA), Energy Transfer Partners (ETP), and Williams Partners (WPZ) ended the week with 1%–2% gains.

On a year-to-date basis, MLPs are down just 3.9% compared to a nearly 13% fall in both crude oil prices and the broader energy sector, as represented by the Energy Select Sector SPDR ETF (XLE).

Fund flows

The Alerian MLP ETF (AMLP) had a net flow of $43 million for the week ended July 14, 2017. The First Trust North American Energy Infrastructure Fund (EMLP) received $11 million inflows in the week.

Short interest in EPD and PAA rose

Short interest in Enterprise Products Partners and Plains All American Pipeline rose by nearly 18% and 22%, respectively, on June 30, 2017, according to the data released on July 12. Short interest in Williams Partners and Energy Transfer Partners, on the other hand, fell 5% and 9%, respectively. A rise in short interest indicates that more investors expect the price of a stock to fall, and vice versa.

Plains All American Pipeline crossed above its 50-day moving average on July 12, 2017. Let’s take a closer look at the stock’s recent performance in the next part of this series.

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