Here at DAC, we have written at length about crude and natural supply and demand dynamics, geopolitical risks, and energy valuations that I imagine many of you have memorized our commentary. It will likely not come as a surprise, but most of these trends are still just as relevant today in our MLP investment thesis. Volumes for both crude oil and natural gas have continued to accelerate in the U.S.; Saudi Arabia has fallen back into a recession, Iran has deployed tanks to the boarder of Iraq and Kurdistan, and the war of words continues between the U.S. and North Korea; and lastly, yes, MLP valuations remain cheap.
The bull market continued its unabated run during the third quarter, despite the anticipated seasonal effect. Historically the third quarter contains the worst months of a year’s performance, and many market professionals thought this year would be especially likely to witness a correction. But not even President Trump’s tweets, nor “Rocketman’s” North Korean missile launches, nor even the Federal Reserve’s continued tightening pace seems to be able to stop the uniform melt upward in price levels of this bull market.