United States Oil Fund
In the last two parts, we analyzed the best and worst performing midstream MLPs on Friday, November 6. 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 1.7% 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 $0.91 lower, or 2%, at $44.29 per barrel. However, crude oil rigs continued to fall for the tenth consecutive week. For context, the upstream energy company heavy SPDR S&P Oil & Gas Exploration & Production ETF (XOP) fell 0.66%.
Most upstream MLPs, which have already lost significant market value since the rout in the energy prices, fell. They tracked the fall in crude oil prices. The top upstream MLP losers include Linn Energy (LINE), Legacy Reserves (LGCY), BreitBurn Energy Partners (BBEP), and Mid-Con Energy Partners (MCEP). They fell 8.6%, 5.7%, 4.4%, and 4.3%, 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 1.2%.
Alerian MLP ETF
The Alerian MLP ETF (AMLP) is comprised of 23 midstream energy MLPs. It fell 1.7% on Friday. AMLP underperformed the SPDR S&P 500 ETF Trust (SPY) and the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) by 1.63 percentage points and 1.02 percentage points in Friday’s trade, respectively. SPY tracks the broader S&P 500 Index. It fell 0.05%. AMLP has returned -23% YTD (year-to-date), while SPY rose 2.2% over this timeframe.
For more company and industry analysis on MLPs, visit Market Realist’s Master Limited Partnerships page.