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About Me
- joewxman
- a meteorologist with a knack for trading and investing in MLPS! I also like horse racing, enjoy cigars and a good port wine.
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6 comments:
why wont line break their hedges and re-hedge with oil at 110? if I had a mortgage at 20% interest, I would certainly refi at 2% regardless of the 1.5 points upfront cost. maybe i'm missing somthing but it seems that would more of a catalyst than selling assets.
It would cost them a ton. They would have to pay the difference of where the hedge was set versus today's price. It would be enormous.
If oil prices stay in a range above $80 for a prolonged period, E&P MLPs and Canadian energy trusts will gradually replace their hedges with new contracts at much higher prices. This would supercharge their results and drive unit prices sharply higher.
Bruce
Bruce -
Thanks. That is what I assumed but there must be some reason why Line wont or cant do it. That would seem to be a great catalyst for the units.
To be clear, they can only enter into new hedge contracts as their old ones end. They can't do anything about their existing contracts.Thus, it will be a gradual process but if oil and gas prices stay elevated, the positive economic impact will be huge.
Bruce
ATN on the tape!
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