Which MLP Subgroups Were the Biggest Losers during May 2017?



Marine transportation

In this article, we’ll analyze the performance of MLP subgroups in May 2017. Marine transportation MLPs comprised the worst-performing subgroup during the month. These MLPs include Teekay Offshore Partners (TOO), Navios Maritime Midstream Partners (NAP), and Golar LNG Partners LP (GMLP).

Marine transportation MLPs fell ~13.5% during May 2017. TOO was the biggest loser within the subgroup. We’ll look into TOO’s May 2017 performance later in this series.

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Upstream MLPs

Upstream MLPs, including Legacy Reserves (LGCY) and EV Energy Partners (EVEP), were among the worst-performing subgroups in May 2017. Upstream MLPs, which have direct crude oil exposure, are negatively impacted by the recent volatility in crude oil prices. The survival of these upstream MLPs remains uncertain under the prolonged low price environment.

Liquids transportation MLPs

Liquids transportation MLPs, which are mainly engaged in the pipeline transportation of crude oil, NGLs, and refined products, are among the worst-performing MLPs in recent months. The MLP subgroup, with MLPs like Plains All American Pipeline (PAA) and Enbridge Energy Partners (EEP), fell 6.6% in May 2017.

This decline could be attributed to tensions over a possible cut in production by drillers due to a decline in crude oil prices. Lower production directly impacts the throughput volumes of liquids transportation MLPs.

Downstream MLPs

Downstream MLPs, including Alon USA Partners LP (ALDW) and Calumet Specialty Products Partners (CLMT), was the only MLP subgroup that ended in the green by the end of May. Downstream MLPs’ recent gains can be attributed to expectations of higher refining margins in the coming quarters due to the decline in crude oil prices.


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