Strong global demand for US hydrocarbons is lifting midstream profits and supporting volume growth, RBC Capital Markets said in the midstream weekly on Friday.
For the week ended July 30, the Alerian MLP Index fell 0.5% while the S&P 500 gained 0.4%, RBC said.
Year to date, the AMZ has risen 21.6%, outperforming utilities by 1,614 basis points and real estate investment trusts by 155 bps, but trailing oilfield services by 1,036 bps and exploration and production companies by 1,689 bps.
Front-month West Texas Intermediate crude fell 9% to about $83.50 a barrel, while Henry Hub natural gas declined 5% to $2.76 per million British thermal units.
Sunoco (SUN) led weekly gains with a 1.9% advance, helped by potential refinery tailwinds, while Venture Global (VG) dropped 12.7% as weaker Dutch Title Transfer Facility gas prices weighed on sentiment, RBC said.
Enterprise Products Partners (EPD) beat Q2 expectations after stronger global demand for US hydrocarbons generated about $200 million in benefits across natural gas liquids, crude oil and petrochemicals.
EPD also raised growth capital spending by $700 million to add Permian processing plants and a natural gas liquids fractionator. RBC said the projects support long-term volume growth and bode well for Energy Transfer (ET), Targa Resources (TRGP) and Kinetik Holdings (KNTK).
Looking ahead, RBC expects demand-driven volumes, commodity tailwinds and margin strength to remain common themes during the upcoming earnings season.
RBC continues to favor Kinetik Holdings, citing new Permian gas takeaway capacity and growing opportunities in New Mexico's Delaware Basin.
The firm noted the Bureau of Land Management's May 2026 lease sale generated about $4 billion in bids, surpassing the previous $972 million record set in 2018.
RBC said KNTK's sour gas infrastructure provides a competitive advantage because new projects face permitting timelines of more than three years for acid gas injection wells.
RBC also reaffirmed its positive view on Cheniere Energy (LNG), noting 95% of its contracted volumes extend through 2035. The firm said LNG can fund two additional brownfield expansion projects after Corpus Christi Midscale Trains 1-9 while maintaining a strong balance sheet.
RBC said TRGP remains well positioned as customer-backed expansion projects reduce capital risk. The firm expects rising gas-to-oil ratios to support mid-to-high single-digit natural gas production growth even if crude production levels flatten.
Williams (WMB) remains one of RBC's preferred names because of its exposure to growing power-related gas demand. The firm expects WMB to deliver more than 10% adjusted EBITDA compound annual growth through 2030, with sanctioned projects and Haynesville growth already contributing about 9%.
RBC said Williams also has an attractive portfolio of Transco expansion and Power Innovation projects, which should benefit from growing power demand.
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