Midstream Energy | Earnings expected in 2023

We're positive on midstream in 2023 due to solid fundamentals, strong FCF and attractive cash returns to shareholders. And with China reopening and strong European demand, U.S. LNG exports will remain strong, recommend LNG,TRG,EPD,ET,PAA.

1. Strong US LNG on robust Europe demand and low US prices. U.S. LNG exports will remain strong as Europe seeks to displace Russian gas supplies. As China reopens, there could be upward pressure on global LNG prices.

2. NGL Demand Recovery. We expect a rebound in NGL fundamentals in 2023 (including NGL prices and US LPG exports), as global petchem demand improves driven by a reopening of China.

3. Permian gas pipeline bottlenecks could constrain oil supply growth. We expect Permian oil supply growth to disappoint relative to expectations due to a lack of gas takeaway capacity.