Could the Shale Revolution be driving oil prices higher? It seems counter-intuitive – the U.S. is on course to be the world’s biggest oil producer by next year. And it was the additional shale supply that led to the 2014-15 oil collapse. Yet, a growing chorus of industry voices is warning of an impending supply […]
In recent years as MLP investors balked at providing the growth capital sought by midstream energy infrastructure, the biggest companies have been converting to corporations (see MLPs Searching for a New Look). The collapse in MLPs during 2014-15 slowed investment, subsequently causing many of the biggest companies to simplify as they concluded that the MLP […]
Although MLPs are cheap by historical standards, the persistence of their attractive valuation should prompt observers to think a little harder. The almost 5% yield spread between the Alerian MLP Index and ten year treasuries is 1.5% wider than the 20-year average of 3.5%. However, the MLP yield spread to treasuries has been historically wide […]
A few months ago the NYTimes ran an interesting piece on the difference between intra-day and overnight returns on the stock market. The article compared a strategy of buying on the open and selling every day at the close (“IntraDay”), with a strategy of buying on the close and selling the next morning at the […]
Volatility is not the investor’s friend. Some will immediately take issue with this – volatility caused by falling prices can mean opportunity, and volatile rising prices are surely welcome. While true, investments that gyrate cause investor stress which often leads to poorly timed sell decisions. Although a company’s long-term profitability should be more important, the […]
A friend of mine recently returned from a trip to Texas and Louisiana, where he met with many contacts and friends in the energy infrastructure sector. In-person discussions and site visits can often leave a more powerful impression than reviewing events from a distance. My friend, an experienced investor, returned with his already optimistic view […]
2013 and 2014 were great investing years. The S&P500 was +32% in 2013 and followed up with +14% the following year. MLPs also delivered strong performance. As long-time investors know, the Alerian MLP Index peaked in 2014 and even now remains 35% lower, while the S&P500 has continued to scale new heights. Investors in MLP-dedicated […]
This year’s MLPA conference at the Hyatt Regency Orlando reflected the sector’s current transition. It was rebranded from years past to be the MLP & Energy Infrastructure Conference (MEIC), now open to energy infrastructure corporations as well as MLPs. Revealingly, this inevitable recognition of the continuing shift of MLPs to a corporate structure was not […]
On the University of Texas website is a documentary titled Gift from the Earth: Natural Gas. It describes the construction of a pipeline to transport natural gas from Texas to population centers on the east coast, as far away as New York City. The pipeline was built by the Transcontinental Gas Company (Transco), and the […]
Reports on the Shale Revolution rarely discuss its impact on U.S. energy security, but with little fanfare it’s affording the U.S. greater geopolitical flexibility. The Administration’s decision last week to withdraw from the Iran nuclear deal was made without significant regard to the ensuing reduction in Iranian oil exports. Successive U.S. presidents back to Richard […]