ETFdb Logo
  • ETF Database
  • Channels
    • Themes
      • Active ETF
      • Alternatives Channel
      • Artificial Intelligence
      • China Insights
      • Climate Insights
      • Core Strategies
      • Crypto
      • Disruptive Technology
      • Energy Infrastructure
      • ETF Building Blocks
      • ETF Education
      • ETF Investing
      • ETF Strategist
      • Faith-Based Investing
      • Financial Literacy
      • Fixed Income
      • Free Cash Flow
      • Innovative ETFs
      • Invest Beyond Cash
      • Leveraged & Inverse
      • Modern Alpha
      • Portfolio Strategies
      • Tax Efficient Income
    • Asset Class
      • Equity
        • U.S. Equity
        • Int'l Developed
        • Emerging Market Equities
      • Alternatives
        • Gold/Silver/Critical Materials
        • Crypytocurrency
        • Currency
        • Volatility
      • Fixed Income
        • Investment Grade Corporates
        • US Treasuries & TIPS
        • High Yield Corporates
        • Int'l Fixed Income
    • ETF Ecosystem
    • ETFs in Canada
    • Market Outlook
    • Crypto ETF Hub
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Database Categories
    • Indexes
    • Scenario Analysis
    • Watchlists
    • Head-To-Head ETF Comparison Tool
    • Mutual Fund To ETF Converter
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
  • Research
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF of the Week Podcast
    • Gaining Perspective Podcast
    • ETF Prime Podcast
    • Video
  • Company
    • About VettaFi
    • Get VettaFi’ed
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. Energy Infrastructure Channel
  2. OPEC Production Cuts and the Midstream
Energy Infrastructure Channel
Share

OPEC Production Cuts and the Midstream

Elle Caruso FitzgeraldApr 05, 2023
2023-04-05

Investors may be wondering how the upcoming OPEC+ production cuts will affect the midstream space.

Oil headlines over the past few days have been dominated by the surprise OPEC+ decision announced Sunday to cut production in an effort to support oil market stability. OPEC+ oil producers will further oil output cuts by approximately 1.16 million barrels per day (MMBpd), beginning in May and lasting until the end of the year.

The pledges bring the total volume of cuts by OPEC+ to 3.66 MMBpd, equal to 3.7% of global demand.

In October, OPEC+ announced a cut of 2 MMBpd in response to rising interest rates and the softer global economy. While headlines focused on a 2 MMBpd supply cut from OPEC+, the cut was based on August 2022 production quotas – not actual production levels, as nearly all the countries party to the agreement have been producing below their August targets, according to Stacey Morris, head of energy research at VettaFi.

Oil surged on Monday following the most recent news of production cuts, with oil prices notching their biggest gain in nearly a year. While MLPs/midstream have less sensitivity to commodity prices given their fee-based business models, the space is poised to benefit from the lifted energy sentiment.

Midstream’s lower sensitivity to commodity prices insulates companies’ cash flows from plunging prices. Some companies will enjoy an upside from higher prices, particularly gathering and processing names that tend to be more sensitive to commodity prices, but relative to exploration and production companies (E&Ps) whose profits directly depend on the price of oil or natural gas, the exposure for midstream is more muted, according to Morris.

Midstream’s defensiveness was a favorable quality in mid-March; the segment demonstrated resiliency as concerns for the global economy and risk-off sentiment sent oil prices and energy stocks lower.

Investors looking to add exposure to the midstream space might consider the Alerian MLP ETF (AMLP A-), the ETRACS Alerian MLP Infrastructure Index ETN Series B (MLPB ), or the ALPS Alerian Energy Infrastructure Portfolio, a variable investment trust.

For more news, information, and analysis, visit the Energy Infrastructure Channel.

vettafi.com is owned by VettaFi LLC (“VettaFi”). VettaFi is the index provider for AMLP, MLPB, and ALEFX, for which it receives an index licensing fee. However, AMLP, MLPB, and ALEFX are not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of AMLP, MLPB, and ALEFX.

Loading Articles...
Our Sites
  • VettaFi
  • Advisor Perspectives
  • ETF Trends
Tools
  • ETF Screener
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Database Pro
More Tools
  • Financial Advisor & RIA Center
Explore ETFs
  • ETF News
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Information
  • Contact Us
  • Terms of Use and Privacy Policy
  • © 2025 VettaFi LLC. All rights reserved.

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X