Crude Oil Hammered Hard – MLP’s Not so Much

By: ,

Today crude oil prices started off weak today – down 50 cents or so before going into freefall around 11 am when it was announced that over 9 million barrels of oil daily were produced daily last week–the most in at least 31 years.  Some analysts claim that production will continue to grow in the months ahead.  With West Texas Intermediate at $75/barrel we question whether production will grow much in the near future as E & P companies have already begun to cut back on capital spending.  There may be growth as ‘in process’ projects are wrapped up, but the number of drilling rigs out there working is already dropping.  With shale production there is typically a huge decline in daily well production during the 1st year and only new wells keep production high.  With rig counts dropping it won’t be long before the affect is felt.

Surprisingly MLP’s are getting only moderately hit today with 15 issues down over 3%–a couple weeks ago when prices fell to $80 over 40 issues fell by over 3%.

We believe it is still best to stand aside until this all plays out.

----ADVERTISEMENT----
X
Are YOU Ready for the Biden Disaster Plan?
"...It's worse than you think."
—Dr. Mark Skousen
X
Search Dividend Investor