The 10 MLPs Most Correlated with Crude Oil


Nov. 20 2020, Updated 12:55 p.m. ET

MLPs’ correlation with crude oil

MLPs generally don’t have direct crude oil exposure, due to their fee-based businesses. However, natural gas processing and commodities marketing result in high direct crude oil exposure. MLPs involved in natural gas processing have direct exposure to NGL (natural gas liquid) and natural gas prices due to contract type. In turn, NGL prices are linked to crude oil prices.

In this series, we’ll look at the ten MLPs most correlated with crude oil amid crude oil price volatility. For an update on crude oil prices, read Is It the Beginning of the Bear Market for Crude Oil Prices?

The top ten MLPs, according to their correlation with crude oil, are as follows:

We’ll look into their correlation with crude oil and their crude oil exposure throughout this series.

Article continues below advertisement

AMLP versus crude oil

The Alerian MLP ETF (AMLP), which comprises 25 energy MLPs, has a strong correlation with crude oil. AMLP’s one-year correlation with crude oil was 0.51 as of October 6, 2017. Among AMLP constituents, DCP Midstream has the highest correlation with crude oil, while Rice Midstream Partners (RMP) has the lowest. In the next article, we’ll look into EnLink Midstream’s correlation with crude oil.


More From Market Realist

    • CONNECT with Market Realist
    • Link to Facebook
    • Link to Twitter
    • Link to Instagram
    • Link to Email Subscribe
    Market Realist Logo
    Do Not Sell My Personal Information

    © Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.