The Zacks Oil and Gas - Production & Pipelines sector presents a promising outlook due to midstream operations' lower exposure to commodity prices' volatility. Midstream operations involve the processing, storage, and transportation of oil and gas, which are less susceptible to market price fluctuations than upstream activities like exploration and production. This aspect bolsters the stability and potential for steady growth within this segment of the industry.
1. The Zacks Oil and Gas - Production & Pipelines sector shows a promising outlook due to lower exposure of midstream operations to commodity prices' volatility.
2. The midstream operations, which include processing, storage, and transportation of oil and gas, are less susceptible to market price fluctuations compared to upstream activities.
3. The sector has demonstrated significant resilience during market upheavals due to the stability provided by midstream operations.
4. The low risk associated with fluctuating oil and gas prices in midstream operations comes from operating on long-term, fixed-fee contracts, providing a predictable revenue stream.
5. Despite the ever-changing energy market, the sector is expected to remain stable, showcasing its robustness against market volatility.
In 2020, despite the global recession due to the pandemic, the midstream segment in the U.S. oil and gas industry saw an average revenue growth of approximately 2.3%.
The Zacks Oil and Gas - Production & Pipelines sector has shown significant resilience during market upheavals, thanks to its midstream operations. These processes, including transportation, storage, and wholesale marketing of crude or refined petroleum products, have minimal risk associated with fluctuating oil and gas prices. In fact, these operations often operate on long-term, fixed-fee contracts, offering a sort of predictable revenue stream, regardless of the ever-changing energy market. As such, this sector is expected to remain stable, proving its robustness in the face of market volatility.