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Chart Watch: Four major energy indexes record double-digit losses in Q4'18


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Chart Watch: Four major energy indexes record double-digit losses in Q4'18

After a stable third quarter with only two losses reported, six out of eight SNL Energy sub-sector indexes were negative in the fourth quarter of 2018, according to S&P Global Market Intelligence data.

The SNL Electric Company Index and SNL Energy Large Diversified Index were the only two indexes that carried momentum from the third quarter of 2018 and finished the final quarter of the year with gains of 1.1% and 0.5%, respectively, in spite of a dip in the second half of December 2018.

The SNL Midstream Energy Index, the SNL MLP Index, the SNL Coal Index and the SNL Merchant Generator Index remained in the red territory for most part of the fourth quarter, with all those indexes recording double-digit losses.

The SNL Midstream Energy Index finished the quarter with a 17.1% loss, compared with a 3% gain in the third quarter of 2018. The SNL MLP Index shed 14.8% during the period, after recording a 5.4% gain during the quarter ended Sept. 30, 2018. Those declines came as investors in 2018 pressured MLPs to restructure through means such as eliminating required cash payments to their general partners, merging with those general partners and even rolling up into their parent corporations and converting to C-corporations.

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The SNL Energy Coal Index widened its losses to 14% during the fourth quarter, as U.S. metallurgical coal producers continued to grapple with market challenges, including logistical and capital constraints that kept a lid on further growth, as well as the apparent reluctance from investors to embrace sector improvement or to add coal stocks to their portfolios. During the quarter, Mission Coal Co. LLC and Westmoreland Coal Co. along with its master limited partnership, Westmoreland Resource Partners LP, filed for Chapter 11 bankruptcy protection.

The SNL Merchant Generator Index stayed in the negative zone for the most part and finished the fourth quarter with a loss 11%, compared to gains of 1.8% in the third quarter of 2018.

The SNL Gas Utility and SNL Energy Small Diversified indexes saw multiple ups and downs during the period but each finished fourth-quarter 2018 with losses of 4.6% and 3.7%, respectively.