Annus Horribilis for MLPs
Despite the returns seen recently for MLPs generally, we are very optimistic about the outlook for MLPs in the long-run. Bottom line, we see the demand for midstream services to continue to expand. While we expect the volumes of oil will decline in the coming quarters, we expect the volumes of gas to be produced will still increase. And while oil is in oversupply for the current time, strong demand growth is being spurred by lower prices.
The Weather Will Change for MLPs
The advantages and competitiveness of North American shale assets will only grow over time and we expect production to resume its increase at some point. We believe the recent sell off in MLPs is due to forced selling and a typical equity market cascade and overshoot, which has created a potentially attractive opportunity for investors to allocate to the asset class. Adapting Mark Twain to the MLP market, the reports of its demise are greatly exaggerated.
Are MLPs Waiting for Godot?
Like the absurdist play where two characters Vladimir and Estragon wait for a mysterious Godot who never shows up, investors in MLPs continue to wait for definitive answers to the "big questions" facing MLPs: when will interest rates rise and what will happen with future oil production and prices?
MLPs Waxing not Waning
We view the recent sell off of MLPs/midstream energy infrastructure companies as a buying opportunity. Our long-term evaluation of the total return prospects of these companies is very good, especially on a risk adjusted basis.
Despite Hitting an Oil Slick, Evidence Underpins a Positive Outlook on MLPs
The fall in energy prices has raised concerns that the dramatic hydrocarbon volume growth we have seen from the new shale plays in the U.S. in the past few years is over or might even reverse. We believe these concerns are overblown. We think the current dislocation in the commodity markets is a case of supply temporarily getting ahead of demand.
Capital Raising in the MLP Sector Remains Active
We continue to see evidence that underpins our long term positive outlook on MLPs and midstream energy infrastructure companies. The need for new midstream infrastructure remains significant and announcements of large projects continue to be made. New export markets for U.S. hydrocarbons continue to develop and offer new profit opportunities for MLPs.
The Outlook for MLPs and Midstream Energy Infrastructure Continues to Look Bright
The quarter saw a number of positive developments that underpin our long term positive outlook on MLPs. Firstly, the need for new midstream infrastructure remains significant, and a number of announcements of large new projects highlighted that this need is not abating. Also, a significant new development in the quarter was the emergence of new export markets for ethane and condensate which will entail associated infrastructure development and other possible profit opportunities for MLPs.
Need for New Midstream Energy Infrastructure Remains Strong
Capital expenditures expected to surpass $640 billion by 2035, says David Chiaro, co-portfolio manager of the Eagle MLP Strategy Fund.
How the Pioneer of Hydraulic Fracturing changed the MLP Landscape
A banner year for MLPs and the future looks bright.
Has Washington Drama Taken Its Toll On MLPs?
They did it! They blew it up! shouts Charlton Heston in the iconic ending scene of the film Planet of the Apes when he finds out he has been living on a post-nuclear war planet Earth. Americans are probably having some of the same feelings about our current world resulting from the ongoing political nuclear war raging in our nations capital.