United States Oil Fund
In the last two parts of this series, we analyzed the best and worst performing midstream MLPs on Tuesday, August 11. To put those movements into context, we’ll analyze the performance of energy-related ETFs and upstream MLPs on the same day.
The United States Oil Fund (USO) fell 2.69% yesterday. USO tracks the daily movement in WTI (West Texas Intermediate) light crude oil. On Tuesday, US crude oil settled at its lowest level in more than six years on China’s decision to devalue the yuan. The weakness in the Chinese economy could lead to a fall in global crude demand. WTI crude oil for September delivery settled $1.88 lower, or 4.20%, at $43.08. For context, the upstream energy company heavy SPDR S&P Oil & Gas Exploration & Production ETF (XOP) fell 0.40% yesterday.
Most upstream MLPs, that have already lost significant market value since the rout in the energy prices, fell in yesterday’s trade. They tracked the fall in crude prices. Top upstream MLP losers include Linn Energy (LINE), Mid-Con Energy Partners (MCEP), Memorial Production Partners (MEMP), and Vanguard Natural Resources (VNR). They fell 5.03%, 4.28%, 3.32%, and 3.02% yesterday, respectively. Upstream companies’ earnings are significantly tied to crude oil and natural gas prices. The United States Natural Gas Fund (UNG) tracks daily movements in natural gas futures. It rose 0.44% yesterday.
Alerian MLP ETF
The Alerian MLP ETF (AMLP) is comprised of 25 midstream energy MLPs. It rose 0.20% yesterday. AMLP outperformed the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) and the SPDR S&P 500 ETF Trust (SPY) by 0.60 percentage points and 1.10 percentage points in yesterday’s trade, respectively. SPY tracks the broader S&P 500 Index. It fell 0.90% yesterday. AMLP has returned -15.64% YTD (year-to-date), while SPY rose 1.52% over this timeframe.
For more company and industry analysis on MLPs, visit Market Realist’s Master Limited Partnerships page.