Proactive - Interviews for investors
VettaFi's Stacey Morris highlights midstream stability amid oil volatility, natural gas growth
VettaFi Head of Energy Research Stacey Morris joined Steve Darling from Proactive to discuss the performance and positioning of the Alerian Midstream Energy Dividend ETF, and to provide a broader outlook on the midstream energy sector in the context of today’s evolving market dynamics.
Morris began by explaining the role of the midstream segment within the energy value chain, describing it as the “shipping and handling service” of the industry. Unlike upstream producers that are heavily exposed to commodity price fluctuations, midstream companies are focused on transporting, storing, and processing oil and natural gas—services that are typically governed by long-term, fee-based contracts. This structural model, she emphasized, gives midstream operators stable, predictable cash flows, making them more resilient in volatile or declining energy price environments.
The conversation turned to recent weakness in oil markets, with U.S. oil benchmarks falling roughly 17% between April 2 and April 8, 2025. Morris attributed the drop primarily to increased supply from OPEC+ nations and mounting concerns over global economic growth and trade activity. “There’s just been a number of concerns around the outlook for the global economy or trade,” she noted, which has added pressure to oil prices in the short term.
However, Morris pointed out that midstream energy assets tend to outperform in such environments. Their reduced sensitivity to commodity pricing and defensive investment characteristics—especially consistent dividend payouts—make them an appealing option for income-focused and risk-averse investors.
One of the most compelling parts of the midstream growth story, Morris said, is its exposure to natural gas, which continues to see rising demand from multiple sectors. She highlighted projections that U.S. natural gas demand is set to grow by 25% between 2024 and 2030.
Morris emphasized that midstream companies are critical enablers of this growth, thanks to their ess
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