MLP ETFs Capture U.S. Energy Expansion

By Max Chen, ETF Trends

The U.S. is pumping out more black gold than ever as shale oil and gas production accelerates. As the country moves toward energy self-sufficiency, investors can take a look at master limited partnership exchange traded funds to capitalize on oil boom.

According to BP Plc (NYSE: BP), the U.S., the world’s largest producer of oil as of 2013, will be able to meet all its energy needs on its own by 2035 due to increased shale oil and gas projects, along with slowing demand, reports Brian Swint for Bloomberg.

Over the next two decades, Asia and Europe will be the main oil importers, with global energy demand to rise 41% by 2035 from 2012, slower than the 52% gain over the past two decades.

“Both oil and gas import concentration will increase massively in Asia and Europe,” BP Chief Economist Christof Ruehl said in the article. “About 80 percent of all traded oil will go into Asia.”

Meanwhile, investors can capitalize on the U.S. oil production boom through master limited partnerships.

MLPs are businesses that engage in energy infrastructure activities, including the processing, storage and transportation of minerals and natural resources. While MLPs are associated with the energy sector, they have a low correlation to energy prices, along with the broader equities markets, as the assets act like a toll-road in the nation’s energy infrastructure. Consequently, MLPs are ideally situated as the U.S. pushes around more volume.

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Global X MLP (MLPA) is a component of the D2 Capital Management Multi-Asset Income Portfolio. 

Disclosure:  I own the D2 Capital Management Multi-Asset Income Portfolio

The views expressed here are that of myself or the cited individual or firm and do not constitute a recommendation, solicitation, or offer by myself, D2 Capital Management, LLC or its affiliates to buy or sell any securities, futures, options or other financial instruments or provide any investment advice or service. D2, its clients, and its employees may or may not own any of the securities (or their derivatives) mentioned in this article.

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