Oil closed on the open outcry session down about 5 dollars and at the low of the day and the selling continues in electronic trading. Stocks are firming nicely but MLPS are tied to broader energy which is selling off in the last hour here. Hard to see how we will come back today in the face of headwinds like this.
If oil is in for a selloff (and that is a big if) refiners are due for a nice bounce. In my never to be humble opinion of course. Went long some Tesoro (TSO) and Valero (VLO) july calls this morning.
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5 comments:
Pretty aggressive jumping into short-dated calls on refiners on oil's first significant down day in awhile... I think that we need to stay agnostic a little longer on MLP-crude correlations or inverse correlations - we haven't seen consistent relationships between commodity-dependent energy stocks and MLPs in either direction since oil's epic run. If anything, there might be a statistically significant relationship between MLPs and natural gas, but again, we've seen oil and gas on a steep climb during a period of a largely technical bounce in MLPs.
Just my thoughts...
i tend to live a little dangerously in the rrading world but i would agree with you. There is defenitely alot of confusion out there but i still think there is room for a big energy selloff in here. Maybe it began today and then again maybe not.
we'll see
TYG, the closed-end MLP fund, got whacked almost 6% today. Volume of over 1 million indicates some institutional bailing.
Dave
Reason for TYG selloff...
Tortoise Energy Infrastructure prices 1.6 million share offer at $31.25 apiece
LEAWOOD, Kan. (AP) -- Energy-related portfolio manager Tortoise Energy Infrastructure Corp. on Thursday priced an offering of 1.6 million shares at $31.25 apiece.
Merrill Lynch & Co. is underwriting the offering. Tortoise has granted the bank a 45-day option to buy up to 240,000 additional shares to cover over-allotments.
Tortoise plans to use proceeds from the offering to pay off debt and add to its investments.
The company's shares fell $1.27, or 4 percent, to $30.62 in midday trading.
Poor deal for anyone who bought that one.
Secondary offerings are a four letter word lately. See BWP!
Mr. Pipes
Mr. Pipes,
You spoke too soon, my friend. Take a look at APL! That's the first hot follow-on offering MLPs have seen in a LONG while... perhaps the first hot follow-on offering is a positive sign for the MLP sector as a whole?
People seemed to jump in aggressively to buy up APL as it approached the infamous 10% yield line.
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