United States Oil Fund
In the last two parts in this series, we analyzed the best and worst performing midstream MLPs on Friday, July 31. 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 3.17% on Friday. USO tracks the daily movement in WTI (West Texas Intermediate) light crude oil. On Friday, WTI crude oil for August delivery settled down $1.40, or -2.88%, at $47.12 per barrel. For context, the upstream energy company heavy SPDR S&P Oil & Gas Exploration & Production ETF (XOP) fell 2.29% on the same day.
Linn Energy’s (LINE) bloodbath continued on Friday with a single day loss of 15.13% as crude oil continued to fall due to excess supply concerns. Linn Energy’s chances for distribution suspension get stronger as crude oil continues to fall. On Thursday, Linn Energy fell 26.30% after the company announced its “intent to recommend suspension of distribution” in the 2Q15 earnings released on July 30, 2015.
BreitBurn Energy Partners (BBEP), Vanguard Natural Resources (WNR), and Legacy Reserves (LGCY) are among the other upstream MLPs that fell in Friday’s trade. They fell 7.76%, 9.60%, and 8.01%, respectively.
Investors are dumping upstream MLPs with earnings significantly tied to crude oil and natural gas prices. Other MLPs might also announce distribution suspension as crude oil continues to fall. The United States Natural Gas Fund (UNG) tracks daily movements in natural gas futures. It fell 2.18% on Friday.
Alerian MLP ETF
The Alerian MLP ETF (AMLP) is comprised of 25 midstream energy MLPs. It fell 0.52% on Friday. AMLP underperformed the SPDR S&P 500 ETF Trust (SPY) by 0.37 percentage points, but outperformed the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) by 1.77 percentage points during Friday’s trade. SPY tracks the broader S&P 500 Index. It fell 0.15%. AMLP has returned -12.04% YTD (year-to-date), while SPY rose 2.41% over this timeframe.
For more company and industry analysis on MLPs, visit Market Realist’s Master Limited Partnerships page.