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Oil Price Resilience Fuels Another Big Energy Stock Rally This Week (ETE, AMID, JPEP, CCLP, XCO)


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Oil prices, along with some other catalysts, fueled double digit rallies in Energy Transfer Equity, American Midstream Partners, JP Energy Partners, CSI Compressco, and EXCO Resources.

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Oil Price Resilience Fuels Another Big Energy Stock Rally This Week (ETE, AMID, JPEP, CCLP, XCO)

  1. 1. Oil Price Resilience Fuels Another Big Energy Stock Rally This Week f Image Source: JP Energy Partners.
  2. 2. Oil surged 8% this week despite the fact that the producers' meeting between OPEC and Russia did not lead to an expected agreement to freeze production. Crude was unfazed by that outcome, instead ending the week at nearly $45 a barrel, which is a 2016 high. Instead of focusing on the disappointing Doha meeting, oil traders see that production declines in the U.S. are starting to take hold and will lead to a rebalancing of the oil market later this year.
  3. 3. What: JP Energy Partners (NYSE: JPEP) jumped more than 22% this week.
  4. 4. So What:  Key driver: The energy market rally  Oil prices proved to be resilient after the collapse of talks between OPEC and Russia to freeze production last weekend  That provided all the fuel energy stocks needed to rally this week, with MLPs in particular enjoying a big week
  5. 5. Now What:  In addition to the improvement in oil prices, a number of MLPs announced key strategy changes including raising fresh capital and reducing their distributions to better weather the downturn  Key takeaway: This was a case where the rising tide lifted all boats
  6. 6. What: American Midstream Partners (NYSE: AMID) rallied 23.2% this week.
  7. 7. So What:  Key driver: The oil price and MLP rally  Much like JP Energy Partners, American Midstream Partners was caught up in the combined oil price/MLP rally this week  Though, the company did announce that it will release its first quarter results on May 9
  8. 8. Now What:  There’s a growing possibility that the company will follow its MLP peers and announce a reduction to its distribution at that time, especially since many of the peers that have made these announcements have seen their unit price spike  Key takeaway: Investors seem to be banking on a strategy change from American Midstream
  9. 9. What: EXCO Resources (NYSE: XCO) rallied 27.3% this week.
  10. 10. So What:  Key driver: The crude oil rally  The cash strapped company had to reduce its 2016 capex budget to a mere $85 million, which is 69% lower than last year, due to weak commodity prices  However, with those prices improving the company could have a bit more breathing room than anticipated
  11. 11. Now What:  Any excess cash flow would enable the company to continue to chip away at the debt weighing down its balance sheet  Key takeaway: With oil moving higher, investors see a light at the end of the tunnel for EXCO Resources
  12. 12. What: Energy Transfer Equity (NYSE: ETE) surged over 32% this week.
  13. 13. So What:  Key driver: A tax issue  Energy Transfer has been involved in a drama-filled merger with Williams Companies  That deal, however, is on the verge of falling apart due to a potential tax issue
  14. 14. Now What:  That’s welcomed news for investors that don’t want the deal to go through because of concerns that the incremental debt needed to close the transaction could be the undoing of the company  Key takeaway: Investors are growing more hopeful this deal will soon die
  15. 15. What: CSI Compressco (NASDAQ: CCLP) jumped 32.4% this week.
  16. 16. So What:  Key driver: The distribution is staying put for now  While a number of MLPs recently announced distribution decreases, CSI Compressco announced this week that its payout was remaining status quo for the time being
  17. 17. Now What:  This helped calm worries that another payout reduction was in the cards after the company already cut the payout once this year  Key takeaway: With the payout staying put, investors can keep their minds at ease
  18. 18. This could be the next billion- dollar iSecret