I think whether oil is down $10, or up $10 from here, won't matter that much on volumes running through the pipeline. No way would I want to be short this in here, with dividend liability.
I love this post! its underpinned by the assumption the Saudis and OPEC can sustain net losses to their financial reserves for a period of 3-5 years, LOL!
Given that the Saudi have depleted their financial reserves by over 20% since the start of this squeeze play on US shale producers and others, they have way too many internal entitlement programs and domestic/international security worries to sustain net financial outflows for 3-5 years! Aquire ETP at current levels and on dips while soaking up the 9.6% yield is a investor utopia. This is a opportunity just waiting to pop.
We have had a down day already.. actually two of them.. Now looking at the charts this 45 level is a break or bust point.. Need to make a new high today and we should head to 50..
Agree that emotions run the markets and the last 6 days prove that. nothing has changed but we are no up big time recently.
I totally understand the businesses of KMI and ETP. And you are correct that the percentage of their business devoted to oil is limited. Facts don't always drive markets, emotions do. If the price of oil remains low, the market believes the customers of KMI and ETP will suffer, thus increasing risk for the two entities. There is no other way to explain the price decreases for the mid-stream MLP's. As oil prices have risen in the past week, so have the stock prices of the MLP's (count KMI as an MLP). Whether supported by the fundamentals or not, it all happened...just as I said...
looks like just after close there was a large spike to 45.50 ? , most likely etp will be well over fifty by January, but who knows, if etp drops I will buy some more, this is a very top company, if you look out 5 - ten years etp will do great. etp is a longer term stock.
Big exports just around the corner with much more to come - at much higher prices than domestic sales.
Sentiment: Strong Buy
Weird minor selloff at end of day today, with WTI approaching $49 and Brent at $52, one-month highs. I swear, I will never understand "the market".
I got low on cash last week as the month/quarter ended on a dive and some buys fired off.
I've been angling for 20% or more cash for a while now, so when I saw the unexpected shortterm profits today, I decided to rebuild some cash and sold my Sept 28 $40 buy for $45 today.
ETP is normally buy-and-collect for me, and this might not look like the best timed move later on, I said to myself, but no one ever went broke taking a profit and I have three other buys from years past so own plenty.
AFTER that, I read my favorite analyst's latest comments and he states the only potential negative is the Rate-of-Growth of the distribution Might slow. Oh well, the dip below $40 was a market-mayhem gift, and I still own plenty. Heck, the market is so crazy around anything oil, maybe I'll get a chance to recycle soon.
This is totally a silly thread. It lacks base in reality. The Sauds sell oil to support their national budget. They don't manufacture iPhones or steel or security software or anything else. Their "game" is selling oil, not gasoline or diesel. They are one seller in a market that others have found attractive to enter. They must increase volume to make up for lower margin, and/or adjust their national spend. It's not complicated. And no matter how low "oil" goes, ETP will collect a fee to transport hydrocarbons.
This is really sort of a silly thread IMO. How much of EPD, ETP business is oil? Well under half. EPD is under 20%. They do not care what happens to oil price as the simply transport it and separate NGLs for NG so it can go thru pipelines!
Cheap oil means more oil and oil-derived products will be used. ETP is in the transportation business. If more products are used, then more products are transported, meaning ETP earns more money. "Lower for Longer" oil is good for ETP.
The Sauds can't say 'no mas', they must pump as much as they can as fast as they can. Their shenanigans in the past have allowed/incentivized others to figure out how to produce at lower-than-recent levels. New competitors have entered their market and they ain't goin' away (U.S.).
The Sauds must adjust to lower margins and that will mean adjusting their domestic spend. They ain't stupid, but their golden years are likely behind them.
Note: ever wonder why they don't export refined products?
Note2: OMG, they've announced intention to build more refineries with the intention to export! I guess they're moving up the value-added chain.
That's so off, I'm awarding you the "ignore" button. ETP has little to do with the price of oil, they have a lot to do with getting paid to transport oil, or gas, or what-not energy.
The lower the price of oil/gas/energy goes, the more it will be used, and the more ETP's services will be needed.