CRITICAL JUNCTURES HERE FOR OIL & NAT GAS

Charts for crude and natgas show us we are at some important inflection points. The nat gas chart has finally stopped that long hideous decline that began in August of 2008. I'm using the UNG as a proxy for nat gas here. The crude chart has a nice looking base here and we have taken it to the very top of that range as we near 60 dollars this morning. So inventory numbers this morning could be the catylist for a breakout or fakeout move.



Yesterday we saw MLPS follow the financials down and then bounce off the lows in the last hour while energy stocks actually finished higher on the day. We continue to follow the moves in the yield market rather then energy as a whole. Yesterday financials sold down as equity comes to market and perhaps mlps could have been taking some of that same perception. After all when your group is up 25% since January 1st, it is not a bad move for companies to take advantage of a double digit stock price to sell some equity. So far Holly Partners (HEP) Energy Transfer (ETP) Plains All American (PAA) Inergy Partners (HEP) Sunoco Logistics (SXL) Enterprise (EPD) Kinder Morgan (KMP) and Linn Energy (LINE) have come to market in the last few months selling more shares. Linn did it yesterday. ( I think i got them all here). One way to look at this is if the mlp rally continues, the companies that have done the equity offerings already could be free to move higher since there is a low risk of them coming to market to sell more shares so soon.

I combed through the EV Partners conference call transcript courtesy of Seeking Alpha and picked up on a few things. One is the company is planning to do some sort of purchase with some equity and that the company has been paying down debt in this enviornment and that they are hedged out to 2013. Also they are not very bullish on the nat gas price. Also we have the Markwest (MWE) conference call transcript. The stock closed down over 1 point yesterday after the earnings and ahead of the call. I couldn't find anything to cause the pullback there so it may have been just buy the rumour sell the news. On a question of what it would cost to tap the credit markets in this enviornment and the response was that the cost of money was probably some where north off 11.5% which shows you just how tight things still are in the bond market for some of these companies. 1.4 times distributable cash flow coverage is healthy so the 64 cent distribution seems safe. Earnings last night from Western Gas Partners (WES) which look in line.

This morning we have slightly higher crude, slightly lower stock futures. I've noticed that financials have turned lower this morning and they could be leading us down at the open again. Its a little early but some far no morning news items and no upgrades or downgrades.

Here is a piece on Investorpedia on MLPS recommending a few of them. Nothing new here but its a short read.