EUROPE’S ENERGY CRISIS IS KEEPING ENERGY PRICES HIGH
America leads the world in oil and gas production. We believe midstream energy infrastructure offers predictable cash flows to investors.
Another Power Auction Hikes Electricity Prices
PJM Interconnection announced the results of their capacity auction last week. This is where suppliers of electricity quote prices to provide surge capacity for periods of high demand (typically hot summer days). It used to be uneventful until last year, when the clearing price was 9X higher than before. This led to the price hikes […]
Energy Is Wall Street’s Favorite Sector
The revenue and earnings outlook for the energy sector has deteriorated this year. Alone among the S&P 500’s eleven sectors, FactSet shows declining revenues of –9.6% when companies report for the second quarter based on bottom-up analyst forecasts. 2025 opened with high expectations following Trump’s election victory. And while the White House has followed through […]
Not All Growth Projects Are Good
Kinder Morgan (KMI) kicked off pipeline earnings season last week, as they do every quarter. Their adjusted EBITDA came in a little ahead of expectations at $1.97BN vs $1.95BN. Management guidance was positive. LNG exports and data center power needs are the two growth drivers for natural gas pipelines. KMI’s Trident Intrastate Pipeline secured […]
Next Leg Up
Morgan Stanley’s bullish report on US LNG stocks last week gave the sector a lift. The biggest impact was felt by NextDecade (NEXT), which was up 17%, bringing its market cap to $2.8BN. NEXT is still a small cap stock with no dividend, unusual for the midstream sector which is dominated by large-cap, investment grade […]
Power Auctions Are Getting Interesting
Last Wednesday PJM Interconnection began their Capacity Auction. PJM runs the largest electricity grid in the US, extending from the east coast as far west as Illinois. The auction sources commitments for surge capacity, to ensure that even during times of high demand the system can meet the need for power. Capacity auctions haven’t historically […]