18 Mar

Midstream Underperformed the Energy Space Last Week

WRITTEN BY Rabindra Samanta

Energy stocks

In the week ending March 15, upstream stock Laredo Petroleum (LPI) fell the most among the energy stocks under review in this series, which include the following ETFs:

  • the Alerian MLP ETF (AMLP)
  • the Energy Select Sector SPDR ETF (XLE)
  • the VanEck Vectors Oil Services ETF (OIH)
  • the VanEck Vectors Oil Refiners ETF (CRAK)
  • the SPDR S&P Oil & Gas Exploration & Production ETF (XOP)

Midstream Underperformed the Energy Space Last Week

In addition to US energy companies, a few foreign-headquartered integrated energy companies listed in the United States are also under review including Imperial Oil (IMO) and China Petroleum & Chemical (SNP).

Laredo Petroleum fell despite a rise of 4.4% in US crude oil prices. A 2.4% fall in natural gas prices last week might have dragged Laredo Petroleum. The company operates with a production mix of ~30% in natural gas.

Other underperformers

Cheniere Energy Partners (CQP), Western Midstream Partners (WES), Holly Energy Partners (HEP), and Enable Midstream Partners (ENBL) had the second, third, fourth, and fifth-largest declines among the energy stocks last week. AMLP rose the least among major energy subsector ETFs last week

On March 11, Holly Energy Partners announced that it will report its first-quarter earnings results on May 1. The FOMC’s meeting scheduled on March 19–20 might have kept investors skeptical about these midstream stocks. Midstream stocks usually have a higher dividend yield in the energy sector and are sensitive to any changes in the interest rates.

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