United States Oil Fund
In the last two parts, we analyzed the best and worst performing midstream MLPs on Friday, October 30. 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) rose 1.2% on Friday. USO tracks the daily movement in WTI (West Texas Intermediate) light crude oil. In Friday’s trade, WTI crude oil for December delivery settled $0.56 higher at $46.59 per barrel. The oil rigs’ count continued to fall for the ninth straight week. For context, the upstream energy company heavy SPDR S&P Oil & Gas Exploration & Production ETF (XOP) rose 1.3%.
Most upstream MLPs, which have already lost significant market value since the rout in the energy prices, rose. They tracked the slight rise in crude oil prices. The top upstream MLP gainers include EV Energy Partners (EVEP), Linn Energy (LINE), BreitBurn Energy Partners (BBEP), and Legacy Reserves (LGCY). They rose 4.3%, 4.1%, 3.6%, and 2.6%, respectively. For an in-depth analysis on 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 3.3%. On Friday, natural gas futures settled $0.06 cents higher, or 2.8%, at $2.32 per MMBtu (British thermal units in millions) as the weather forecast showed the first sign of cold weather.
Alerian MLP ETF
The Alerian MLP ETF (AMLP) is comprised of 23 midstream energy MLPs. It rose 1.0% on Friday. AMLP outperformed the SPDR S&P 500 ETF Trust (SPY) by 1.5 percentage points but underperformed the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) by 0.24 percentage points in Friday’s trade. SPY tracks the broader S&P 500 Index. It fell 0.43%. AMLP has returned -22.43% YTD (year-to-date), while SPY fell 1.2% over this timeframe.
For more company and industry analysis on MLPs, visit Market Realist’s Master Limited Partnerships page.