• 4 minutes Natural gas is crushing wind and solar power
  • 7 minutes OPEC and Russia could discuss emergency cuts
  • 10 minutes Peak Shale Will Send Oil Prices Sky High
  • 13 minutes Don't sneeze. Coronavirus is a threat to oil markets and global economies
  • 2 hours On Venezuela
  • 52 mins CCP holding back virus data . . . . . . Spanish Flu 1918 MUTATED, Came in 3 waves, Lasted 14 months and killed upward 5% World population
  • 38 mins "Criticism of migration will become a criminal offense.  And media outlets that give room to criticism of migration, can be shut down." - EU Official to the Media.
  • 1 day Cheap natural gas is making it very hard to go green
  • 5 hours The Great Recession recovery wasn't powered by Obama; it was oil and gas
  • 6 hours Gold.
  • 10 hours Engineering, Politics and Political Correctness from Down Under
  • 7 hours WTI are we seeing the perfect storm
  • 19 hours I Love Hills
  • 1 day Oil and gas producers fire back at Democratic presidential candidates.
  • 4 hours So the west is winning, is it? Only if you’re a delusional Trump toady, Mr Pompeo, by Simon Tisdall
  • 1 day Investments worthy in versatile and clean natural gas
Dan Dicker

Dan Dicker

Dan Dicker is a 25 year veteran of the New York Mercantile Exchange where he traded crude oil, natural gas, unleaded gasoline and heating oil…

More Info

Stay Away From MLPs For The Time Being

In 2008, as oil was moving through its lows of $32 a barrel, there was obvious carnage going on in the stocks of oil companies. But one group was establishing themselves as the most battered, least favored of all the sub-sectors in the energy world – The pipeline and storage companies.

The MLP 'craze' was already at full tilt in the years leading up to the oil collapse, and dozens of pipeline and other midstream players happily watched their stocks soar in the tax-advantaged mania that the limited partnership vehicle delivered. They were so smart, writing down decaying assets and delivering 85 percent or more of their revenues to their 'partners' – hedge funds were using shares of the companies as placeholders for cash, lapping up the 'distributions' instead of settling for 3 percent on treasuries (at the time). Pensioners flocked to them. The model might have had a cyclical 'ponzi-like' feel to it, with ever-competing debt cycles, but as long as the product flowed and the distributions got paid, everyone was happy to look the other way.

Then the market nosedived.

As much as the continued production and transport of U.S. crude and natural gas was at risk, 2008 had an added ingredient that annihilated the MLP's – credit lock-up. Without available credit to fund necessary expansion, the group became untouchable. In 2008 and early 2009, MLP's dropped well over 50 percent of their value, with some of even the most conservative members paying…




Oilprice - The No. 1 Source for Oil & Energy News