We finally figured out what it would take to really get fossil fuels moving and it's restrictions by the Saudis, the coming failure of Venezuela, strife in Iraq and some increase in demand that is offsetting the fact that we are producing more oil today than at any time since the shale renaissance began.
This plus the fact that it looks like that master limited partnerships are not going to be taxed differently than they have been is finally driving the pipeline stocks higher, which is pretty amazing because they had begun to vie with the retailers for the worst stocks in the show.
Here's what you need to know about the pipelines. First, we have so much oil in the Permian we don't have the pipe to get it to the terminals where it can be exported. That's why Action Alerts PLUS club members know we like Magellan Midstream Partners (MMP) .
Second, the group trades as if it was one big ETF, so it doesn't matter who is doing well or badly, but I can tell you I do not trust that Energy Transfer Partners (ETP) 13% distribution, and I recognize that if they cut it all the stocks will trade down.
Third, there is not enough impetus yet for more natural gas pipelines, particularly to Mexico where the demand could be bigger if only Mexico would build natural gas power plants. That's one of the reasons why Apache (APA) has been so stalled, but given that it is the biggest gainer in the S&P 500, maybe something is going on. (Magellan Midstream Partners and Apache are part of TheStreet's Action Alerts PLUS portfolio.)
Anyway, I think the oil market has quietly gotten its footing and that it is still one more positive surprise in the market right now.