As the U.S. overtakes Russia as the world’s largest producer of oil and natural gas, exchange traded fund investors could take advantage of the growing revenue streams from master limited partnerships.
The U.S. extracted about 22 millions a barrels a day of oil, natural gas and related fuels in July, whereas Russia puts its 2013 oil-and-gas production at around 21.8 million per day, the Wall Street Journal reports.
The recent surge in U.S. output is attributed to new “fracking” techniques in shale-rock formations of oil and natural gas that were previously unmanageable. Specifically, supply from Bakken oil field and the Eagle Ford shale formation continues to rapidly increase.
“The increase in production in the region is fostering midstream development, including building new pipelines, expanding existing pipelines, railcars, trucks, and barges,” S&P Capital IQ said in a research note earlier this year. “We are positive on midstream companies leveraged to liquids production in the Eagle Ford Shale and Permian Basin.”
As the U.S. extracts more oil, master limited partnerships, which specialize in transporting oil and gas, could benefit from the increased volume, generating greater revenue and potentially increasing dividend payouts for investors. [High-Yield MLP ETF Carves Out Volatile Oil Prices]