Market rebalancing concerns were highlighted after the EIA's report of record setting crude stocks, 528.4MM bbls, and Saudi Arabia's Energy Minister Khalid al-Falih comments that there would be no "free rides" for U.S. shale producers benefiting from the upturn. While market forecasters continue to highlight future production concerns due to global investment reductions, the short term process of rebalancing supply and demand invites volatility, offering buying opportunities to those with a longer time horizon. Most expect midstream MLP's to benefit later this year from hedged production gains continuing through 2018 even if energy prices continue to weaken.
American Midstream Partners up 146% overt the trailing twelve months,, completed their stock Merger with JP Energy Partners
Enterprise Products Partners held their Analyst Day, where management outlined their view that the US market will need to export light sweet crude to balance the market, and the significant NGL opportunity, where supply is expected by grow by over 40% by 2020 to meet gulf coast petro-chemical demand. Project backlog was increased from 6.7B to 7.1B from their previous guidance
Retail investors continue to add cash to MLP fund products averaging over $200MM per week over the past four weeks
Seven midstream units reported Year over Year increasing Operating Cash Flow per unit and Distributable Cash Flow coverage,as calculated in our Scores report indicating that most units are still trying to recover from lower volumes and margin. When screening the universe for DCF coverage in excess of 1.3x, 17 out of 21 units have a mean YTD return of 9.00%.
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1 . High Risk of Distribution Cut
2 . Distribution At Risk
3 . No Risk of Distribution Cut
4 . No Risk of Distribution Cut; Growth at Risk
5 . No Risk of Distribution Cut; Strong Growth