Midstream energy storage investment

What does a midstream energy company do?

Midstream energy companies build and operate pipelines and storage facilities for the transportation of domestic energy supplies critical to the nation's economy. These companies own the infrastructure that connects the energy raw commodity to the end user.

Why should you invest in midstream companies like energy transfer?

Midstream companies like Energy Transfer are experiencing significant growth due to rising natural gas demand from power plants and data centers. Investing in CEFs holding midstream assets offers high yields, leverage benefits, and avoids K-1 tax issues, making them attractive for income-oriented investors.

What are midstream activities in oil & gas industry?

Midstream activities include the processing, storing, transporting and marketing of oil, natural gas, and natural gas liquids. The two other major stages are upstream, which refers to raw crude oil and natural gas production, and downstream, which refers to the refining of crude oil into gasoline, diesel, jet, and other fuels.

Are midstream companies more defensive than other energy subsectors?

Midstream companies collect fees for performing services based on the amount of volume handled, says Stacey Morris, director of research at Alerian. These businesses tend to be more defensive than other energy subsectors.

Are Exploration & Production companies better than midstream companies?

Compared to exploration and production companies, midstream companies pay more attractive yields, and they have a lower correlation with oil prices, she says. Exploration and production companies, known as E&Ps, have more direct exposure to commodity prices than midstream companies, she adds.

Should you invest in the midstream business?

"Some have a national focus on huge pipeline assets. Others are more local and focused on gathering and storage. "There is no best way to invest in the midstream business since there are pros and cons to each strategy, Bright says.