United States Oil Fund
In the last two parts, we analyzed the best and worst performing midstream MLPs on Monday, November 2. 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 0.41% yesterday. USO tracks the daily movement in WTI (West Texas Intermediate) light crude oil. In yesterday’s trade, WTI crude oil for December delivery settled $0.45 lower, or 1%, at $46.14 per barrel. WTI crude oil settled lower due to concerns about growing global crude supplies and weakening Chinese growth. The upstream energy company heavy SPDR S&P Oil & Gas Exploration & Production ETF (XOP) rose 2.5%.
Most upstream MLPs, which have already lost significant market value since the rout in the energy prices, rose yesterday despite the slight fall in crude oil prices. The top upstream MLP gainers include EV Energy Partners (EVEP), Atlas Resource Partners (ARP), BreitBurn Energy Partners (BBEP), and Legacy Reserves (LGCY). They rose 7.3%, 4.9%, 4.8%, and 4.8%, 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 fell 3.3%. Natural gas futures for December delivery settled $0.07 lower, or 2.8%, at $2.26 per MMBtu (British thermal units in millions) due to weak demand expectations.
Alerian MLP ETF
The Alerian MLP ETF (AMLP) is comprised of 23 midstream energy MLPs. It rose 1.3% yesterday. AMLP outperformed the SPDR S&P 500 ETF Trust (SPY) by 0.07 percentage points but underperformed the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) by 1.20 percentage points in yesterday’s trade. SPY tracks the broader S&P 500 Index. It rose 1.2%. AMLP has returned -21.5% YTD (year-to-date). SPY rose 2.4% over this timeframe.
For more company and industry analysis on MLPs, visit Market Realist’s Master Limited Partnerships page.