Bloodbath Continues: AMZ Fell More than 5.0% Last Week

AMZ fell 6.7% last week

The bloodbath continued in the midstream energy sector in the week ending February 9 due to general weakness in US markets amid the global sell-off. The Alerian MLP Index (^AMZ), which includes 50 energy MLPs, fell 5.2% last week and ended at 267.7. At the same time, the S&P 500 (^GSPC) (SPX-INDEX) fell 5.2%.

Bloodbath Continues: AMZ Fell More than 5.0% Last Week

The weakness in MLPs last week could also be attributed to the sharp decline in crude oil prices. US crude oil fell 9.5% last week and ended at $59.2 per barrel. For a recent update and the outlook on crude oil prices, read Oil Bears: Downside in US Crude Oil Next Week.

Out of the total 93 MLPs, 88 ended in the red, one remained unchanged, and four ended in the green. Among the top MLPs, Energy Transfer Partners (ETP), Williams Partners (WPZ), and Enterprise Products Partners (EPD) fell 4.7%, 4.1%, and 4.1%, respectively, while Plains All American Pipelines (PAA) rose 5.4%. The Alerian MLP ETF (AMLP) ended the week 6.0% lower.

Plains All American Pipeline was the top MLP gainer last week. The other three gainers were Terra Nitrogen (TNH), Plains GP Holdings (PAGP), and Green Plains Partners (GPP). Plains All American Pipeline’s strong gains despite turmoil in the MLP space could be attributed to its strong earnings growth and positive rating updates.

Fund flows

The Alerian MLP ETF saw a net outflow of $119.7 million in funds last week, while the J.P. Morgan Alerian MLP Index ETN saw a net inflow of $11.7. There might be a shift in investors’ focus to fixed income-focused MLP funds from equity-focused MLP funds amid the recent correction. Overall, AMLP has seen a net outflow of $165.1 million since the beginning of the year, while AMJ has seen a net inflow of $12.9 million.

Next, we’ll discuss last week’s top MLP losers.