Alerian MLP ETF

Sunoco Logistics has the lowest profit margin and ROE among its peers. Its profit margin and ROE of 1.6% and 1.7%, respectively, are well below the group average.

The Permian Basin is one of the US’s primary drivers of oil production growth. Market Realist provides an overview of this prolific hydrocarbon asset with a primer piece: “Introduction to the Permian Basin”.

Spectra Energy Corp. (SE), headquartered in Houston, Texas, owns and operates a large and diversified portfolio of natural gas–related assets in North America.

ONEOK Partners (OKS) is a master limited partnership (or MLP) engaged in gathering, processing, storing, and transporting natural gas and natural gas liquids (or NGLs) in the U.S.

ETFs (exchange-traded funds) have stock-like characteristics, while ETNs (exchange-traded notes) possess bond-like traits.

Most MLPs operate in the midstream energy industry. They’re mainly involved in gathering, processing, storing, and transporting energy commodities.

Hurricane Harvey hit the US Gulf Coast last week. The US Gulf Coast is a major destination for US refineries and energy infrastructure.

In the seven calendar days to February 8, 2018, OIH, XOP, XLE, and AMLP fell 13.6%, 12.7%, 11.8%, and 8.2%, respectively.

Significantly higher rates of propane exports have helped to boost propane prices—and the margins of some MLP names.

In the trailing week, OIH rose 0.5%—the only energy ETF on our list that closed in the green. US crude oil futures rose 2.6%.

Sunoco Logistics (SXL) will share the proportionate capital expenditure in the Bakken Pipeline project. This led SXL to revise its capital expenditure for 2015.

Master limited partnerships rely highly on external capital to fund growth Master limited partnerships or MLPs are specially structured entities that must pay out most of the cash they generate to unitholders. So MLPs rely especially on external funding sources (as opposed to internally generated cash) to execute growth projects and acquisitions. Because of this […]

ETP’s interest in Sunoco Logistics (SXL) gives ETE acccess to SXL’s geographically diverse portfolio of complementary pipeline, terminalling, and acquisition and marketing assets.

MLPs saw a huge decline in prices during the first week of May driven by the sharp decline in crude oil prices.

Atlas Pipeline Partners (APL) released its financial information for 1Q14 on May 5, 2014.

On February 10, 2014, Boardwalk Pipeline Partners (BWP) announced 4Q13 and FY2013 results. The company reported 4Q13 adjusted EBITDA of $129.6 million.

Enterprise Products trades at a distribution yield of ~4.9%. One of the reasons for EPD’s relatively lower distribution yield might be its distribution coverage ratio.

Among the energy ETFs, the Energy Select Sector SPDR ETF (XLE) had the highest correlation with US oil (UCO) (USO) prices at 78.7% between May 11 and May 18, 2017.

Although pipelines are the cost-effective way to transport crude oil, they require huge initial investment and are often impeded by regulations from the government agencies.

In 2013, the company processed an average of 780.1 million cubic feet per day of natural gas and produced an average of 91.9 thousand barrels per day of NGLs.

The one-year correlation coefficient between Energy Transfer Equity and crude oil was 0.49 as of July 11.

US residential propane demand is 1.5 MMbpd for the week ended December 4. This was 0.24 MMbpd more than the demand in the week ended November 27.

Sunoco Logistics Partners L.P. (SXL) is a master limited partnership (or MLP). Its Crude Oil Pipelines segment transport 4,900 miles of crude oil, primarily in Oklahoma and Texas.

Traditionally, the Merchant Services segment provides wholesale distributor service of refined petroleum products in the U.S. and the Caribbean.

Propane names such as AmeriGas and Suburban Propane could be helped by this week’s winter storms.

On April 5, 2017, active natural gas (UNG) (FCG) (BOIL) (GASL) futures were trading at a premium of $0.33 to futures contracts 12 months forward.

Last week, frac spreads traded up slightly, and over the medium term, frac spreads are up significantly. This is a positive catalyst for natural gas processors.

On October 3, 2017, US crude oil (USL) (OIIL) November 2018 futures settled $0.33 higher than the November 2017 futures.

Between December 29, 2017, and January 8, 2018, the premium and the oil prices rose. The market expects a tightening supply-demand balance for oil in 2018.

Energy Transfer (ET) released its fourth-quarter and full-year 2018 earnings yesterday.

On December 5, 2017, the January 2018 futures contract for US crude oil settled at a premium of $2.5 to January 2019 futures.

What risk should you know about that could significantly affect MLP valuation? Read on to find out.

On January 2, 2018, natural gas (UNG) (BOIL) (FCG) February 2018 futures settled $0.025 less than February 2019 futures.

On February 9, 2017, US crude oil futures contracts for March delivery closed at $53.00 per barrel—an ~1.3% rise compared to the previous trading session.

ONEOK Partners’ (OKS) natural gas pipelines segment owns and operates regulated interstate and intrastate natural gas pipelines and natural gas storage facilities.

On March 1, 2017, active natural gas (UNG) (FCG) (BOIL) (GASL) futures were trading at a discount of $0.5 to futures contracts 12 months ahead.

The company provides natural gas gathering and processing services in the Eagle Ford Shale play in Texas, as well as in the Anadarko, Arkoma, and Permian basins.

William Companies (WMB) has recovered slightly after a weak August 2017, and it has risen 2.4% since last week. WMB has fallen 3.3% since the beginning of 2017.

Kinder Morgan (KMI), the midstream energy giant, announced a ~75% quarterly dividend cut in its annual outlook release for 2016 on Tuesday.

Alon USA Partners (ALDW), a downstream MLP involved in crude oil refining and refined products marketing, was the top MLP gainer last week.

Gas prices may be low now, but long-term gas drilling is here to stay in North America Currently, natural gas prices are relatively depressed, and short-term natural gas drilling activity on the whole doesn’t appear to be rising (see Why natural gas rigs aren’t likely to rise much through year-end). However, Regency’s purchase of PVR […]

The Alerian MLP ETF (AMLP) and the First Trust North American Energy Infrastructure Fund (EMLP) are two of the largest MLP ETFs.

DPM has substantial liquidity of $1.25 billion under its revolver credit facility. With a current debt-to-EBITDA ratio of 3.3x and a TTM coverage ratio of 1.1x, DPM has a cushion for raising fresh capital.

Futures spread On September 27, 2017, natural gas (FCG) (GASL) (BOIL) 2018 November futures traded $0.04 lower than November 2017 futures. That is, the futures spread was at a discount of $0.04. On September 20, 2017, the futures spread was at a discount of $0.10. Between September 20 and 27, 2017, natural gas November futures […]

A falling inventory indicates that WTI crude oil is moving out of the inland U.S. towards end refining markets with help from new infrastructure coming online.

The EIA estimates that US distillate inventories fell by 2.6 MMbbls (million barrels) to 135.4 MMbbls on September 22–29, 2017.

Buckeye Partners’ (BPL) outlook looks positive from a long-term investment standpoint. At a broader level, ~54% of analysts rate Buckeye Partners as “hold.”

Fractionation spreads got a boost last week with rising crude oil prices.

Antero Midstream Partners, Viper Energy Partners, and Hoegh LNG Partners have the most “buys” among all the publicly traded limited partnerships.

ONEOK (OKE) has generated total returns of 86% so far in 2016. In comparison, KMI, OKS, and WMB have generated total returns of 35%, 40%, and -0.2%, respectively.

US crude oil rose 8.6% last week and ended at $67.4 per barrel. Geopolitical tension increased due to the crisis in Syria.

AMLP has a ~46% total return over the last four years, while MLPI has kept pace with the AMZIX, with total returns of ~76%.

Linn Energy’s (LINE) bloodbath continued on Friday with a single day loss of 15.13% as crude oil continued to fall due to excess supply concerns.

Energy Transfer Equity (ETE) has gained 3.3% since the beginning of 2018. The Alerian MLP ETF (AMLP), which is comprised of 25 energy MLPs has risen 7.8%.

On March 21, Regency closed its acquisition with PVR Partners. The combination creates a fully integrated midstream partnership platform by further expanding Regency’s position in the Appalachia Basin.

MLPs’ sluggishness continued last week despite strong crude oil. The Alerian MLP Index (^AMZ), which tracks the performance of 50 energy MLPs, fell 1.2% last week.

There’s only one sector that didn’t decrease—master limited partnerships (or MLPs). MLPs are special corporate structures that pay most of their earnings as distributions to unit holders. MLPs usually have steady growth.

LINE’s EBITDA shows that it has been struggling with its earnings power lately. It has struggled despite a steady rise in its oil and gas production. LINE’s debt exploded from just over $3 billion in 3Q11 to over $9.5 billion in 2Q14.

As we discussed previously in this series, National Fuel Gas (NFG) noted in its latest fiscal 3Q14 results that its earnings growth was driven by higher earnings in its Midstream and Upstream businesses.

Among MLP funds, exchange-traded notes fell the most while the exchange-traded funds declined the least.

On February 14, WTI crude oil (USO) (USL) (OIIL) (SCO) active futures traded at a discount of $2.84 per barrel compared to Brent crude oil active futures.

Antero Midstream Partners fell 6% last year. However, it had a strong start to the new year. It has risen 6.8% in 2018.

Ethane has historically received significantly more advantageous pricing than dry natural gas.

At ~55.7%, the Alerian MLP ETF (AMLP) had the highest correlation with US crude oil from January 2, 2017, to February 2, 2017.

The rise in the premium, along with the rise in oil prices in the trailing week, could mean that the market expects a supply deficit in the oil market.

MLPs rallied despite crude oil’s weakness last week. The Alerian MLP Index (^AMZ) rose 2.7% during the week and ended at 269.1.

Enterprise Products Partners (EPD) spent $1.2 billion on capital projects in the first quarter.

MLP-focused funds underperformed the SPDR S&P 500 ETF (SPY) in the recent quarter.

Western Gas Partners operates midstream assets located in major onshore producing basins in Wyoming, Colorado, Utah, Kansas, Oklahoma, Pennsylvania, and Texas.

Magellan Midstream Partners (MMP) has made significant investments in pipelines in the Permian region to deliver crude oil from the Permian Basin in west Texas to markets along the U.S. Gulf Coast.

64.7% of the analysts have rated the company as “hold”, while the remaining 35.3% have rated it as “buy”.

The yield spread between the Alerian MLP Index yield and the US ten-year Treasury yield contracted to 5.0% at the end of Q3 from 5.1% at the end of Q2.

Natural gas gathering and processing is a significant part of the operations of many midstream master limited partnerships.

Corporate debt rates for MLPs increased slightly over the past two weeks, but from a long-term perspective debt funding still remains extremely cheap.

AMZI is an index that consists of the top ~25 American energy infrastructure MLPs, which primarily engage in energy commodity transport and processing.

Jeffrey Gundlach also warned about the high-yield market (HYG) (JNK). He said the “clock is running out” for energy companies (IEZ) due to low oil (USO) prices.

At a broader level, ~50% of analysts surveyed by Bloomberg rate Williams Partners a “buy” and the remaining ~50% rate it a “hold.”

Crude stocks at Cushing, Oklahoma increased by 716,000 barrels to 19.6 million barrels (or MMbbls) in the week ending October 10.

On September 20, 2017, natural gas (FCG) (BOIL) October 2018 futures closed $0.10 below its October 2017 futures.

Access Midstream Partners LP (ACMP) is a master limited partnership that provides natural gas gathering and processing services under long-term fixed-fee contracts.

On September 12, 2017, US crude oil (DBO) October 2018 futures settled at $2.09 above its October 2017 futures.

On May 3, 2017, natural gas June 2017 futures were trading at a premium of $0.33 to June 2018 futures contracts.

MLPs recovered slightly in the week ending August 25—possibly due to an overcorrection in the first three weeks of the month.

On October 10, 2017, US crude oil (USO) (DBO) (OIIL) November 2018 futures traded $0.46 higher than November 2017 futures.

Talisman Energy is a global upstream oil and gas company headquartered in Canada. Revenue plunged to $44 million, down from $929 million in 2013.

Recently, Energy Transfer Partners (ETP) merged with Sunoco Logistics Partners. Energy Transfer Partners has lost 2.1% since the beginning of May.

AMLP gained almost as much as the VanEck Vectors Oil Services ETF (OIH) in the week ending August 14.

Tesoro Logistics’ (TLLP) operations are organized into the Crude Oil Gathering segment and the Terminalling and Transportation segment.

NuStar Energy recorded total revenues of $849.2 million, or 8.1% higher than $785.3 million the company recorded in 4Q13.

The best performing midstream MLP on Thursday, June 25 was Western Gas Partners (WES). It rose 0.5% yesterday. However, it’s close to its 52-week low.

On December 29, 2017, the price gap between February 2018 futures and February 2019 futures was $3. On December 22, 2017, that price gap was at a premium of $2.35.

Mars’ mainline capacity is a 54-mile segment from the connections to Ursa and Medusa at the West Delta to the connection with the Amberjack pipeline at Fourchon, Louisiana.

Despite solid earnings growth in the last several quarters, Energy Transfer’s (ET) performance has failed to pick up.

The effect of sampling—the difference in the holdings between MLPJ and its benchmark index—is another cause of the tracking error.

On January 26, a Energy Transfer Partners (ETP) unit lost ~6.4%. A Regency Energy Partners (RGP) unit, meanwhile, gained ~5% to finish at $24.93.

At ~65.2%, the VanEck Vectors Oil Services ETF (OIH) showed the highest correlation with US crude oil between April 4–May 4, 2017.

Upstream companies’ earnings are significantly tied to crude oil and natural gas prices. UNG tracks daily movements in natural gas futures. It rose 0.44% yesterday.

Hi-Crush Partners (HCLP) stock is up nearly 2% in 2018.

The Alerian MLP ETF, which comprises 23 midstream energy MLPs, fell 2.4% on October 22, 2015, along with the entire midstream sector.

Frac spreads traded up slightly last week and have been relatively range-bound over the past several months.