Midstream underperformed the stock market and energy stocks this week. Oil prices were down, natural gas prices continued to crater, probably not due to what the groundhog saw, but it didn’t help. Tech stocks continue to be the shiny object that wins no matter what the Fed is or is not going to do in the next few months. The employment report was good, but not good enough to move the needle on the demand outlook for oil or to generate interest in midstream.
It was ex-dividend week for many midstream companies and MLPs this week, which may have factored into the underperformance this week. In theory, dividend payments are factored into stock prices, but in practice, some investors seeking to rotate out of midstream stocks will wait for that final dividend.