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Shock, rattle and roll: Midstream pipeline investments can buffer portfolios against energy price shocks and help keep returns flowing
Crude oil’s price drop has grabbed the attention of anyone with a stake in energy markets, or any market for that matter as oil is a ubiquitous part of the entire global economy. Ever since fossil fuels became the global energy standard, the market has been subject to price booms and busts, so today’s oil price drop is not surprising; however, the current decline has a different feel than others because it is being driven largely by an oversupply rather than the typical lack of demand brought on by a stalled economy.
“It’s certainly not in the norm to see oil prices collapse as much as they have over the past four to five months,” says Hinds Howard, senior MLP and infrastructure research analyst with CBRE Clarion Securities. “Its impact is going to be varied across the [midstream] sector — certain companies will do better in this environment and other companies will see their growth slow down and certain companies will see their r