Domestic Energy: A Resurging Investment Frontier

Tuesday, February 05, 2013 07:04
edit
Domestic Energy: A Resurging Investment Frontier

Tags: Economic Outlook | energy | investment strategies

Some of the best news for 2012 has received very little attention: in 2012, domestic crude oil production rose more than in another other year in history.
 
And 2013 already looks like it may beat it. The long-held assumption has been that America would forever be dependent on foreign oil. The past three years have turned this premise completely around.

This Website Is For Financial Professionals Only


 
That means the master limited partnership (MLP) may be back. Market size has reached about $40 billion over the past few years and is predicted to grow to $60 billion in the near future.
 
These are not yet numbers of major oil company proportion but they are solid numbers coming out of a period when American dependence on oil has been almost completely foreign.
 
The growth of the market has had a small impact on the oil market, recently lowering crude to $80 per barrel because of the added supply.
 
It seems to be bolstering demand for midstream products and services. The MLP market cap weighting is currently around 7% and it is predicted that good fundamentals will possibly nudge
it to 7.5%.
 
Oppenheimer funds recently bought an MLP, SteelPath. The interest of such a large fund company may be a signal for future energy investing.

Comments (0)

Write comment

You must be logged in to post a comment. Please register if you do not have an account yet.

busy