How Golar LNG Partners’ Correlation with Crude Oil Compares



Golar LNG Partners

Golar LNG Partners (GMLP), which is involved in LNG (liquefied natural gas) shipping, floating LNG liquefaction, and floating LNG floating storage and regasification, has the eighth-highest correlation with crude oil among MLPs. EnLink Midstream Partners (ENLK), which has the seventh-highest correlation, has been discussed alongside its general partner in the second part of this series.

GMLP’s correlation with crude oil was 0.443 as of October 6, 2017. GMLP’s high correlation with crude oil might not be justified, considering its negligible direct commodity price exposure. However, the correlation might, to some extent, reflect the effect of global LNG prices on the partnership’s earnings.

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Analysts’ recommendations

Of the analysts covering Golar LNG Partners, 60% have recommended “hold,” while the remaining 40% have recommended “buy.” GMLP has seen only one rating upgrade in 2017, from Stifel Nicolaus. Stifel Nicolaus downgraded GMLP to “hold.” GMLP is currently trading close to its average target price of $23. In the next article, we’ll discuss the correlation between Genesis Energy (GEL) and crude oil.


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