Simon Lack, Portfolio Manager

It’s been hard to beat the S&P500 so far in 2023. And yet, midstream energy infrastructure continues to close in on a third successive calendar year of outperformance.

It’s always interesting to learn how financial advisers use our energy infrastructure investments in their portfolios. Often, it’s for income, because the 6-7% yields are well covered by cash flow, growing and supported by continued reluctance to boost growth capex. America has the pipeline network we need. New construction gets held up by court challenges from climate protesters, with the delays increasing costs. Equitrans with their Mountain Valley Pipeline project is an example. They announced a further delay because hiring is hard. Their recent 8K SEC filing noted, “multiple crews electing not to work on the project based on the history of court-related construction stops when there’s the risk of another court order stopping work.”

It’s always interesting to learn how financial advisers use our energy infrastructure investments in their portfolios. Often, it’s for income, because the 6-7% yields are well covered by cash flow, growing and supported by continued reluctance to boost growth capex. America has the pipeline network we need. New construction gets held up by court challenges from climate protesters, with the delays increasing costs. Equitrans with their Mountain Valley Pipeline project is an example. They announced a further delay because hiring is hard. Their recent 8K SEC filing noted, “multiple crews electing not to work on the project based on the history of court-related construction stops when there’s the risk of another court order stopping work.”

Last week the Energy Information Administration (EIA) released their 2023 International Energy Outlook. It came out on Wednesday, the same day that Exxon Mobil (XOM) confirmed their acquisition of Pioneer Natural Resources (PXD), and they’re linked in more ways than simply their announcement date.

Last week the Energy Information Administration (EIA) released their 2023 International Energy Outlook. It came out on Wednesday, the same day that Exxon Mobil (XOM) confirmed their acquisition of Pioneer Natural Resources (PXD), and they’re linked in more ways than simply their announcement date.

Only last week a new investor asked how the pipeline sector might respond to geopolitical risk. Conflict in any of the world’s trouble spots is bad for most sectors and the market overall. But energy is different, because the specter of supply disruption draws in buyers.

Only last week a new investor asked how the pipeline sector might respond to geopolitical risk. Conflict in any of the world’s trouble spots is bad for most sectors and the market overall. But energy is different, because the specter of supply disruption draws in buyers.

Changes in US oil inventories sometimes cause a sharp move in the price of crude. It makes perfect sense, even if it’s hard to tease out much of a statistical relationship from the data.