Oil and natural gas are selling off this morning Crude down nearly 2 dollars now as it gives back all of yesterday's gains and natgas is down 4%. I guess the hurricane play isn't going to work; especially when the hurricane is going to be minimal and is heading not toward the guld of mexico producing areas but where there are some refineries and they may be far north of any peak wind and rain. Weather plays in the oil and gas market often times become buy the rumor sell the fact trades and this one seems to be playing out according to form so far.

Nat gas has really taken a nosedive from 13 dollars to now with a 10 handle. Sometimes when markets are irrational they do things that seem to defy all logic. And i am talking about the rally phase here. Nat gas stocks are making money hand over fist but there comes a point where their discoveries of supply are going to effect price. This part of the equation did not play out as many of these issues went to new highs but we must be at the point now where some logic is returning.

Now lets apply that the MLP's. They went down with the collapse of financials which i suppose is logical to some degree. You have to borrow to build and money is tighter so that might lead to more financing with stock which has been done by some issues at progressively lower prices given the downtrend. Then we had pressure from forever rising prices as it impacted hedges among other things so we suffered the indignity of watch energy stocks go up big time except for our.s. 2 headwinds. Now we have a slowing economy and demand destruction going on. Maybe...just maybe..mlps have been pricing in demand destruction all along as these forces aligned themselves.

On the other hand at least so far companies continue to do what they do every quarter...raise distributions which is the ultimate metric here when figuring out who are the outperformers. So the question is given what we have to deal with...will falling energy prices offset the other 2 negatives. Or perhaps if the financial system can at least stabilize and the economy doesn't go into freefall..will mlps be the first group to turn?

It would be encouraging if we could engineer followthrough today given all the market headwinds. Refiners are bid higher so something is going up in the pre market.

DJ headline as Semagroup LP (the parent) files for chapter 11. The child (SGLP) is down 99 cents in pre market trading. No story link available yet.