For energy investors, 2021 will go down as one of the best ever. Benchmark North American crude oil started the year priced well under $50 a barrel but finished at around $77, after spending much of it over $80. Natural gas went from under $2.50 per million BTUs to nearly $6.50, before settling at $3.76.
More than anything else, the commodities’ strength was responsible for lifting the S&P 500 Energy Index and Alerian MLP Index to memorable gains of 53.6 and 39.1 percent, respectively. And as we highlight throughout this issue, a well-chosen portfolio of individual energy stocks did even better.
Wise stock picking in energy mattered just as much in 2021 with the cycle turning higher as it has the past several years when the downside prevailed. And the same will be true in 2022 as the cycle enters its next phase.
Despite some setbacks, Kinder Morgan Inc. (NYSE: KMI) has adapted to where we are right now in the energy price cycle. But effective participation still requires discipline.
Too many small owners lacking critical scale and unprecedented roadblocks to new energy pipeline infrastructure: That’s what was at the core of the unprecedented wave of US oil and gas midstream dividend cuts and bankruptcies of the past few years. Now those same forces are spawning something considerably more positive for investors
There may come a day when US transportation is 100 percent electrified and homes are heated with blended hydrogen. But in the here and now, oil and gas pipelines are essential infrastructure. Exhibit A is the havoc wreaked by the successful hack of systems at the Colonial Pipeline this month.
Even without a repeat of the company’s Q1 windfall, the benefits to Kinder Morgan Inc.’s (NYSE: KMI) underlying business and balance sheet are likely to continue flowing throughout the rest of 2021 and beyond.
Shale exploration and production (E&P) giant, Pioneer Natural Resources (NYSE: PXD) announced a deal to acquire privately-held DoublePoint Energy, but the reception on Wall Street has been less than enthusiastic.
One of the most common questions we receive from readers—especially during our monthly webchats—is what our “absolute top pick” is at any given moment. And as many of you have no doubt noticed, we typically bob and weave a bit in our answers.
BP Midstream Partners LP (NYSE: BPMP) has now reached a formal agreement to be acquired by general partner and 54.35 percent owner BP Plc (London: BP, NYSE: BP). The final terms are for partnership shares to be swapped for 0.575 American Depositary Shares of BP, with an expected close of the transaction sometime in Q1 2022 following a unitholder vote.
EIA Model Portfolio recommendations scored an average total return of 40.6 percent last year. High Yield Energy List picks came in at 39 percent on average. That compares to 53.6 percent for the producers-focused S&P 500 Energy Sector Index, 38.5 percent for the midstream-focused Alerian MLP Index ETF and 28.5 percent for the S&P 500 itself.
In a typical energy cycle, rising demand and higher prices eventually lead to increased production. That in turn means a volume boost for midstream and downstream systems, from gathering pipes and processing facilities near the wellhead to pipeline and storage systems that deliver crude oil to refineries, and from there to consumers and businesses.
By on Nov. 22, 2021
Two companies previously on our Endangered Dividends List have announced cuts since the previous issue of EIA. Phillips 66 Partners’ (NYSE: PSXP) unitholders will see their quarterly payments reduced to 46 cents a share, a -47.4 percent haircut from the current 87.5 cents.
Elliott and Roger on Dec. 30, 2021
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