OKE

It’s been some time since some I’ve seen any discussion on OKE. I found the story compelling and added a small position which is up almost 100%. Anybody else bite on this one?

BRuce

2 Likes

Bruce,

Congrats… not to mention the dividends!

I’ll share what I wrote to members last week…

http://www.eia.gov/naturalgas/weekly/#tabs-supply-3

While I (weakly?) scan this Energy Info Agency report regularly, this caught my eye. So I’m sharing this good news.

The natural gas plant liquids composite price at Mont Belvieu, Texas, rose by 19¢, closing at $5.02/MMBtu

Natural Gas Liquids (NGL) are where our company has most of its commodity price exposure. When the composite is more than $5.00 (this past week it hit 5.02) that’s a good thing. More importantly it’s been trending in the Northeast direction since August.

some NGL price history here: https://www.eia.gov/dnav/ng/hist/ngm_epg0_plc_nus_dmmbtuM.ht…

Click on “monthly” for the chart and you can see NGL prices seem to have bottomed in winter 2015/16. I was hopeful with a rise above $5 in May/June only to have dashed below $5 in early July. So I don’t know if we’re really out of the woods yet.

…and for natural gas itself (small component for OKE - they’re pipeline toll collectors in this arena), an affirmation of demand, even with supply remaining above five year levels:

NYMEX October closes above $3.00 per million btu

the highest front-month contract price since January 2015. The price of the 12-month strip averaging October 2016 through September 2017 futures contracts climbed 11¢ to $3.207/MMBtu.

Seasonal weather is coming which will change the demand from power plants and gas price. Peak gas demand will be interesting this winter with household heating plus more power plant gas usage. January is usually a good time for propane (an NGL) suppliers too.

Joe
who notes this is also good for coal-fired power plants that have enjoyed a good run this summer in the Mid Atlantic states.

Community Fool - Ticker Guide OKE, PRLB, MTZ, & SRCL
click link for my profile & holdings
http://my.fool.com/profile/CMFJambo/info.aspx

3 Likes

for some reason the NGL price history link came up blank. Try this

https://www.eia.gov/dnav/ng/hist/ngm_epg0_plc_nus_dmmbtuA.ht…

Joe
Community Fool - Ticker Guide OKE, PRLB, MTZ, & SRCL
click link for my profile & holdings
http://my.fool.com/profile/CMFJambo/info.aspx

To answer the question is anyone in OKE, I answer in the affirmative. I have been in close to a year. Through periodic buys, my total return has been 67%. I like the long term trend away from coal and into natural gas, but I don’t like to be strictly linked to commodity prices. I continue to believe OKE will solidly beat the market, but the 67% is unlikely to be repeated this year.

Best,

bulwnkl