United States Oil Fund
In the last two parts, we analyzed the best and worst performing midstream MLPs on Wednesday, October 7. 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 1.08% on October 7. USO tracks the daily movement in WTI (West Texas Intermediate) light crude oil. In yesterday’s trade, WTI crude oil for November delivery settled $0.72 lower, or 1.5%, at $47.81 per barrel. The EIA’s (Energy Information Administration) data showed a large crude inventory buildup while the traders were expecting a drawdown. The upstream energy company heavy SPDR S&P Oil & Gas Exploration & Production ETF (XOP) rose 0.44%.
Most upstream MLPs, which have already lost significant market value since the rout in the energy prices, rose on October 7 despite the slight fall in crude oil prices. The top upstream MLP losers include Linn Energy (LINE), Mid-Con Energy Partners (MCEP), Eagle Rock Energy Partners (EROC), and Legacy Reserves (LGCY). They gained 6%, 5.2%, 4.9%, and 3.9%, respectively. For an in-depth analysis of the recent operating and market performance of the four largest upstream MLPs, read Tough Times: How 4 Upstream Energy MLPs Are Faring So Far.
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 0.18%.
Alerian MLP ETF
The Alerian MLP ETF (AMLP) is comprised of 23 midstream energy MLPs. It rose 1.4% on October 7. AMLP outperformed the SPDR S&P 500 ETF Trust (SPY) and the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) by 0.55 percentage points and 0.93 percentage points during trade on October 7, respectively. SPY tracks the broader S&P 500 Index. It rose 0.82% on October 7. AMLP has returned -20% YTD (year-to-date), while SPY fell 3% over this timeframe.
For more company and industry analysis on MLPs, visit Market Realist’s Master Limited Partnerships page.