Perfect confluence? First we have Putin checking off on an oil output freeze and Iran and Iraq not been asked to cut output but to hold it right here, something that OPEC ministers say they are amenable to. Russia had been a bit of a question mark, but Iran and Iraq? That would be big news.
Second we had a cold snap that finally awoke the natural gas bulls and had them snapping up the fuel and the stocks, notably Range Resources (RRC) , Chesapeake (CHK) and Southwestern (SWN) , the big proxy plays.
Third, we had Elliott Management taking a position in Marathon Petroleum MPC and asking them to split into several parts to unlock value. The company's been pretty good at doing so, but Elliott can get things to happen. One of the reasons why we own Arconic (ARNC) in the Action Alerts PLUS charity portfolio is that Elliott is out there pushing for more change.
Fourth, Energy Transfer Equity (ETE) managed to find a way to make more money for its shareholders, even though it was at the expense of Energy Transfer Partners (ETP) , the MLP, by merging it with Sunoco Logistics (SXL) . It's a convoluted situation, but it does show that there's more consolidation coming and the consolidation won't all be as bad for the MLP holders as this one was.
All of these happened in one day; all within the umbrella of a Trump presidency.
What's incredible here is that, frankly, it happened again. Last week when oil hit $43 I said that OPEC would talk it right back up. That's just what happened. Right back up.
But the cold snap was unexpected and it came at a time of record inventories for natural gas, so let's just say the timing was impeccable.
No matter, it all came together. And now if a deal happens, it's not done going higher and the market still loves higher oil. At least one thing hasn't changed post-election day.
