How do these oil and gas MLP's traditionally do in periods of accelerating inflation? I now own 6 of them...BPL, EEM,ETE & ETP; PAA; TPP ). I owned KMP a few years ago but don't really have a lot of experience in the sector. I would think rising inflation and rising interest rates would be tough on these stocks? Do they have much pricing flexibility when inflation moves up, or are they stuck with long term deals and expansion projects that strain under the burden of increased financing costs? Appreciate any input.
I would expect (JMHO) that the price of oil would have more to do with what BPL can charge for use of its pipelines than the U.S. inflation rate. The price of oil does not always go up and down in synch with inflation. Over the last year it has gone up much more than the U.S. inflation rate. During the early '80s, while the U.S. experienced major inflation, the price of oil didn't go up at all. Then again maybe the oil price goes up first and then comes inflation. It's all pretty complicated stuff.