Morning Commentary: Preferreds gain as May begins; crude comes in, weighing on oil and gas names

By Stephanie N. Rotondo

Seattle, May 2 – The preferred stock market was on the rise in early Monday trading, kicking off the new month with a firm tone.

The Wells Fargo Hybrid and Preferred Securities index was up 9 basis points at mid-morning.

A trader said that while there continued to be buzz about the possibility of a couple new deals this week, he had yet to see any further details.

“It’s just going to be quiet until something happens,” he said.

Though the market was generally firm in early trades, a decline in domestic crude oil from its 2016 highs was pressuring oil and gas-linked securities.

Legacy Reserves LP’s 8% series B fixed-to-floating rate cumulative redeemable perpetual preferred units (Nasdaq: LGCYO) were down 98 cents, or 15.87%, at $5.19 at mid-morning. The 8% series A fixed-to-floating rate cumulative redeemable perpetual preferred units (Nasdaq: LGCYP) were off 76 cents, or 12.3%, at $5.42.

The securities are currently not paying distributions.

For its part, domestic crude was down 1.35% in early trading as OPEC reported that its production rose to 32.64 million barrels per day in April, almost hitting the most recent highs.

April also saw a rise in exports from Iraq, as well as Russia.

Still, market participants are hoping that there are signs the oil space is in the process of naturally rebalancing, especially as U.S. active rigs fell again last week and non-OPEC production was expected to experience its biggest production decline in nearly two decades.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.