Midstream had a big week, posting 3.7% returns (AMNA) despite higher interest rates and weak equity markets. Oil prices pushed towards $80/bbl, while natural gas slouched towards $1.50/mmbtu. Broader midstream is only up 2.1% this year, challenged by weaker Canadian names, but MLPs are up 7.2%, keeping pace with the S&P 500 on price return at around 5%.
The interminable earnings season continues. The earnings themselves have featured several beats and not many misses, but more often than not, strong 4Q results have been “sell the news” events because they’ve been accompanied by 2024 guidance that was just in-line with expectations or reiterated.
TRGP was a big exception, trading up sharply in the two days after announcing a strong quarter and in-line guidance. TRP also traded well post earnings, but that followed persistent weakness the last few weeks on higher interest rates. Actually, as the week went on and midstream traded better generally, reactions to earnings got better. In general, there seemed to be relief on the outlooks for natural gas midstream companies like DTM and AM.