Midstream Stocks Outperformed the Energy Sector Last Week

Energy stocks

In the week ending May 24, midstream stock Genesis Energy (GEL) rose the most among the stocks in the energy space. The stock is included in 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 Stocks Outperformed the Energy Sector Last Week

Other strong performers

Shell Midstream Partners (SHLX) and Magellan Midstream Partners (MMP) had the third and fifth-highest increases among energy stocks, respectively, last week. AMLP fell 1.3% and was the outperformer among energy subsector ETFs. Investors’ preference for high dividend yield stocks amid trade war tensions and oil’s fall might have helped these midstream stocks to outperform.

On May 24, Shell Midstream Partners announced that “the systems owned by Proteus Oil Pipeline Company LLC (“Proteus”) and Endymion Oil Pipeline Company LLC (“Endymion”) increased volumes of crude oil from the startup of the Shell-operated Appomattox floating production system via the newly commissioned Mattox Pipeline (“Mattox”), which is majority owned and operated by Shell Pipeline Company LP (“SPLC”).” On the same day, the company’s stock prices rose over 2%.

Last week, upstream stock Occidental Petroleum (OXY) was the fourth-largest gainer among energy stocks. During this period, US crude oil prices fell 6.8%, while natural gas active futures fell 2%. In May, the discount between Midland and Magellan East Houston WTI expanded ~$0.9 from last month, which could boost Occidental Petroleum’s midstream earnings—a positive development for Occidental Petroleum’s stock prices amid weaker energy commodities.