Investors in Master Limited Partnerships (MLPs) have long become accustomed to daily fluctuations in crude oil affecting sentiment for the sector. The slide describing midstream infrastructure as a toll model with limited commodity sensitivity has been dropped from client presentations. It’s no longer credible. The Shale Revolution has shifted the industry from one of stable […]
Last Tuesday, in a kind of return to normalcy, NuStar Energy (NS) funded an acquisition the way Master Limited Partnerships (MLPs) normally do; by issuing equity. NS is an MLP controlled by a publicly traded General Partner (GP) called NuStar GP Holdings (NSH). As we’ve noted in the past, an MLP with a GP looks […]
One of the many benefits of the Shale revolution has been a reversal of the U.S. terms of trade with respect to natural gas (see U.S. Natural Gas Exports Taking Off). We’ve long been a net importer and the Sabine Pass LNG (Liquified Natural Gas) facility in Louisiana was originally intended to augment pipeline inflows […]
Recent weakness in crude oil has spilled over into Master Limited Partnerships (MLPs). Some connection between the two is understandable, because part of the bull case for MLPs lies in growing shale output increasing demand for energy infrastructure. Lower oil prices dampen the enthusiasm for the idea that Exploration and Production (E&P) companies will be […]
The U.S. produces electricity from diverse sources; burning coal and natural gas each provide just under a third of our needs (natural gas is steadily displacing coal, which is good for those MLPs that transport, process and store natural gas). Nuclear is 19%, with the rest being other renewables of which hydro is the biggest. […]
Most MLP investors are attracted by the regular distributions paid out by midstream infrastructure businesses. Some though, are wary of a repeat of the heightened volatility of 2015 even though evidence increasingly supports our analysis from early last year that an improbable confluence of circumstances was responsible (see The 2015 MLP Crash; Why and What’s […]
If you talk to investors about U.S. energy infrastructure, you’re pretty soon going to get to crude oil. A view on one is seemingly predicated on the other. Some investors mutter darkly about assertions in years back that Master Limited Partnerships (MLPs) are a toll-like business model with limited sensitivity to commodities. Although it remains […]
Long time subscribers will recall that back in 2015 this blog sought ever more creative and different ways to communicate the same message, which was that MLP prices had fallen far enough and represented compelling value. Bear markets have an unfortunate tendency to last longer than their opponents would like. Although the sector rebounded strongly […]
My partner Henry Hoffman and I spent Thursday last week at the Capital Link MLP Investing Forum in New York. The mood was cautiously optimistic but certainly wary of another commodity-linked swoon in prices. Meeting one-on-one with company managements is often the best part of such events. We had a very useful discussion with Crestwood’s […]
America’s path to Energy Independence is taking place through myriad advances in hydrocarbon output, driven by the many advantages we possess. In America Is Great! we noted the benefits of America’s energy sector’s large skilled labor force, access to capital, culture of entrepreneurialism, constant drive for productivity improvements, ready availability of water, vast network of […]
