What is OPEC+ and why does their production policy matter?

OPEC+ is a group of oil-producing countries that coordinate their production levels to influence global oil supply. When they increase production, more oil enters the market, which creates more business for companies that transport, store, and process that oil through pipelines and terminals.

What are midstream energy companies?

Midstream companies are the 'middle' part of the oil and gas industry. They own and operate the infrastructure that moves oil from where it's produced to where it's refined and sold - like pipelines, storage tanks, and transportation systems. They make money from the volume of oil that flows through their facilities.

How do midstream companies make money differently from oil producers?

Unlike oil producers who depend on oil prices, midstream companies typically earn fees based on the volume of oil and gas they transport or store. This means they can make steady money even when oil prices are volatile, as long as oil is flowing through their systems.

What does 'dividend yield' mean for these stocks?

Dividend yield shows how much a company pays shareholders each year as a percentage of the stock price. Many midstream companies are known for paying attractive dividends because they generate steady cash flows from their infrastructure operations.

Why might increased oil production benefit these companies?

More oil production means more oil needs to be transported from production sites to refineries and markets. This creates increased demand for pipeline capacity, storage facilities, and transportation services - exactly what midstream companies provide.

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OPEC+ Opens The Taps: Midstream's Moment

OPEC+ has decided to maintain its policy of gradually increasing oil production to meet rising global demand. This creates an investment opportunity in companies that provide the essential midstream services, such as transportation and storage, which will see increased business from the higher oil supply.

Han Tan | Market Analyst

Updated 2 days ago | Published at जुलाई 25