Can anyone explain the effect that NGL price decline has had on MLP's.Un- hedged upstreams are probably hurting but EPD with 80% of it's margins coming from fixed fees should be affected to a lesser degree.
The market has historically always treated G&P MLPs as if they were producing oil and NG and selling at the spot price. The question going forward is if the oil/NG differential narrows then EPD and others will be impacted. The bigger issue is the myth that companies are going to stop production if oil goes under $75. Demand is really very inflexible and companies have huge fixed expenses and contracts to deliver futures product.