10 Jul

MLPs Were Stable Last Week despite Fall in Crude Oil Prices

WRITTEN BY Rekha Khandelwal, CFA

MLPs last week

The Alerian MLP Index, the benchmark index for energy MLPs, rose 0.2% in the week ended July 7, 2017. Enterprise Products Partners (EPD) and Williams Partners (WPZ) each rose 0.6% for the week, whereas Plains All American Pipeline (PAA) and Energy Transfer Partners (ETP) fell 0.2% and 0.9%, respectively. The Alerian MLP ETF (AMLP) fell 0.3%, and crude oil prices plunged 3.9% during the week.

MLPs Were Stable Last Week despite Fall in Crude Oil Prices

The above graph compares the performances of top MLPs as well as crude oil last week. Learn more about factors influencing oil prices in US Crude Supplies and OPEC’s Exports Pressure Oil Prices.

EPD’s distribution increase

On July 5, 2017, Enterprise Products Partners increased its quarterly distribution for 2Q17 to $0.42 per unit, which is a 1.2% quarter-over-quarter increase. This increase was EPD’s 52nd consecutive quarterly distribution increase.

On the same day, EPD also announced additional long-term contracts for its Midland to ECHO crude oil pipeline system. The additional agreements bring total committed volumes on the Midland to Sealy segment of the system to 83% of the segment’s committed capacity. The Midland to Sealy pipeline is expected to begin commercial activities during 4Q17. The pipeline is scheduled to be in full service by 2Q18.

On July 5, 2017, Plains All American Pipeline announced flat distributions for 2Q17.

Fund flows

The Alerian MLP ETF (AMLP) saw a net outflow of $152 million for the week ended July 7, 2017. The Global X MLP ETF (MLPA), the First Trust North American Energy Infrastructure Fund (EMLP), and the InfraCap MLP ETF (AMZA) had net inflows of $1.4 million, $2.5 million, and $5.9 million, respectively, in the week.

Let’s take a look at the current valuations of the top four MLPs by market cap in the next part of the series.

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