Enterprise Products Partners L.P.
) hit a 52-week high of $79.30 during Wednesday's trading session.
The stock closed the session at $78.53, reflecting a solid return
of 11.4% over the past three months. The average trading volume for
the last three months aggregated 1,013,010 shares.
The upside comes on the back of a U.S. Commerce Department ruling
last week. The ruling allowed two companies - Enterprise Products
Pioneer Natural Resources Co.
) - to export ultra-light oil, often referred to as condensate,
after minimal refining in a distillation tower. Export of oil,
permitted from the facilities in the fields of south Texas, will
likely begin as early as August.
The ruling has spread fears that condensate export would be
extended to more U.S. companies, leading to a tight oil market.
This would narrow the gap between the U.S. and international
thereby weakening refiners' margin, as producers will sell oil at
international prices. As such, international prices will likely
fall and U.S. prices would rise. In fact, this phenomenon was
witnessed steadily from the day oil export ban ease was announced.
The spread between the two oil prices narrowed to $6.76 per barrel
on Jul 2.
Enterprise Products Partners is engaged in providing a wide range
of midstream energy services to the producers and consumers of
natural gas, natural gas liquids (NGL) and crude oil. The
partnership's assets include 51,000 miles of onshore and offshore
pipelines, approximately 200 million barrels of storage capacity
for NGLs, refined products and crude oil, and 14 billion cubic feet
of natural gas storage capacity.
We continue to view Enterprise Products Partners as a core holding
in the master limited partnership portfolio, given its string of
organic growth projects, potential acquisitions, strong balance
sheet and solid liquidity position. The partnership is one of the
largest fully integrated midstream service providers with a
positive long-term outlook thanks to its significant geographic and
With its diverse set of NGL, natural gas, crude oil and refined
products midstream infrastructure assets, the partnership possesses
fundamental strengths that will continue to support distribution
Zacks Rank & Stock Pick
With the company's shares trading at a 52-week high, any upside
from here may be limited. The company's Zacks Rank #3 (Hold) also
does not reflect an upside potential.
Some better-ranked oil and gas stocks include
Matrix Service Company
). Both stocks sport a Zacks Rank #1 (Strong Buy).
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ENTERPRISE PROD (EPD): Free Stock Analysis
PIONEER NAT RES (PXD): Free Stock Analysis
MATRIX SERVICE (MTRX): Free Stock Analysis
ENCANA CORP (ECA): Free Stock Analysis Report
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