Press Release: Energy Transfer Announces Fourth Quarter And Full Year 2024 Earnings Release And Earnings Call Timing

Peter Lynch had a fantastic run managing the Magellan Fund, using the basic concept that equity investors should only buy a stock if they understand the business and are confident of holding it through market turbulence. Futures markets can be as rewarding. Traders only need to respect what the brilliant money is doing.

But who are these brilliant players, and what are they currently telling us about crude oil prices?

Many market participants refer to managed money as smart money in the commodity markets. Some of the reasons why they have been designated this term:

• Have an enormous supply of capital
• Higher highly educated employees
• Many have access to market-moving data before it becomes public
• While others may have "friends" in Congress or the Senate
• And the list goes on

Most would think that managed money is smart money with all these advantages, and there is some talent in the managed money arena. However, real smart money (brilliant players) are commercial entities that work with physical commodities daily and are their livelihood. Commercial entities can be producers or processors of the commodity. Because of how closely they work with the physical commodity, they are in touch with the supply/demand of their product, storage factors, shipping logistics, labor cost, exports, extended weather patterns, and seasonal patterns. We will review the current outlook for crude oil prices that these commercials tell us later in the article.

Seasonal patterns for oil

Oil prices are incredibly cyclical due to the enormous demand for oil during the summer driving season and heating homes during the colder months. Because this demand comes at the same time each year, much like planting crops in the spring and harvesting them in the fall, these seasonal patterns can be highly reliable. Commercial traders are aware of these seasonal patterns; after all, their buying and selling of the commodity creates most of them.

Source: Moore Research Center, Inc. (MRCI)

MRCI researched crude oil prices for the past 15 years and found the above seasonal patterns (black line). When trading seasonal patterns, some optimal moves come during periods of the year that create a seasonal low or high and then have a significant move away from that level. Crude oil is no exception. The most dominant low, based on seasonality, typically occurs during the latter part of December and continues into early May.

Commercial entities know that each year in the US, Memorial Day weekend in May begins the summer driving season. After a winter of being confined indoors, consumers are ready for family vacations and getaways. To satisfy this need to travel, refiners must make enough gasoline to supply the demand for this summer driving season. To produce this gasoline, they must buy crude oil months before the driving season.

Source: MRCI

The daily chart for the RBOB gasoline futures contract represents its 15-year seasonal pattern (blue line) and an optimal buy-in period (yellow box). Notice how the gasoline and crude oil seasonal lows are almost identical.

As a crucial reminder, while seasonal patterns can provide valuable insights, they should not be the basis for trading decisions. Traders must consider other technical and fundamental indicators, risk management strategies, and market conditions to make well-informed and balanced trading choices.

The prior reminder reiterates the need to confirm these seasonal patterns with another form of analysis. Technical or fundamental analysis may suffice, but how can we get legal insider information to increase the probability of success in this season's upcoming trade?

The Disaggregated Commitment of Traders (COT) report

Source: Barchart

Before exploring the COT report, let's review the recent price activity of the crude oil market. On the left side of the daily May crude oil chart is a rally off the bottom of a multi-month sell-off from the $78 per barrel level. The rally created the first signs of an uptrend with higher highs and lows. The market then traded sideways with several minor rallies and declines, but the price action did remain within the recent impulse move-up. Much of this sideways action occurred from October to late December.

Could this have been an accumulation pattern, and if so, how could we confirm who was accumulating?

Source: CME Group Exchange

With a dominant seasonal low in the crude oil and gasoline market near, it's a good time to examine what the brilliant players are doing. If the daily trend has turned up and MRCI research has found a dominant 15-year low in crude during December, what else could endorse this seasonal pattern for 2025?

The COT report is telling a terrific story. During seasonal lows, we should pay attention to the processors/users of a commodity activity. If a seasonal low is nearby and the processors/users are bullish, that is the trifecta trade. It's not perfect, but it's certainly more in your favor.

Currently, the processors/users are more bullish (blue line) than bearish (red line). During this sideways activity from October to December, they continued to hold and add to long positions. What stands out as significant is the number of long positions they had compared to last year when the seasonal low began, and prices (yellow line) rallied into May. In 2023, they held 508K longs; for this year's seasonal low, they have 625K contracts. That's an impressive 117K more longs this year than last.

Why would processors/users hold so many excessive longs if they didn't have a reason that we not in the energy field are unaware of? Because they are brilliant players!

They are not waffling over who won the election, the strength of the US Dollar, or any other adverse event that speculators would be discussing. The processors/users have built this long position for a reason. In their opinion, prices are heading higher again this year.

Markets to participate in this opportunity

Futures market traders could trade the standard-size crude oil contract, (QM) the mini-crude oil contract, or the micro-contract (CY). Equity traders may be interested in trading the exchange-traded fund . Bullish oil prices, sometimes seen as an expanding economy, could positively impact the stock market and result in a bullish price move. Trading the mini S&P 500 or the micro-contract to participate.

In closing……

In the world of trading, understanding the dynamics of the markets can make the difference between success and missed opportunities. The seasonal patterns in crude oil and gasoline prices and the insights gleaned from the Commitment of Traders (COT) report provide a fascinating glimpse into how "brilliant players" operate. With their unmatched expertise and strategic positioning, these commercial entities offer valuable clues about market trends. As traders, leveraging these insights while layering them with technical and fundamental analysis can enhance your confidence and decision-making process. The question remains: Will you align yourself with these seasoned players or stay on the sidelines while the next big opportunity unfolds?

As we approach the seasonal low and witness bullish momentum building among processors and users, curiosity is key. What do these "brilliant players" see that we don't? What factors are driving their confidence in higher prices this year? By staying curious and diligent, traders can position themselves for potential gains while navigating the complexities of the market. The tools are available if you're drawn to futures contracts, ETFs, or equities tied to crude oil. The next step is to harness these experienced market movers' insights and shape your strategy for the months ahead.

On the date of publication, Don Dawson did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policyhere.

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As 2025 draws near, dividend stocks offering high yields with resilient payouts are becoming increasingly attractive for investors looking to generate steady passive income. With the market adjusting to a lower-interest-rate environment following three rate cuts, these stocks are positioned to enhance the income potential of your portfolio.

Among the top options in the dividend space, Altria and Energy Transfer appear attractive. Both companies offer impressive yields exceeding 6%, have sustainable payouts, and are focused on consistently rewarding their shareholders. Their ability to deliver regular and higher dividends makes them compelling candidates for any income-focused portfolio in 2025.

Altria, known for its strong market position in the tobacco industry, has a history of maintaining reliable dividend payments, even amid market fluctuations. This track record of stability positions it as a solid option for investors seeking reliable income.

Similarly, Energy Transfer, a leading energy infrastructure company, has shown a strong commitment to rewarding investors with significant dividend payouts and growth. The company’s consistent earnings growth and solid cash flow enable it to offer and sustain attractive yields. Let’s dig deeper.

Dividend Stock #1: Altria

Altria continues to reward shareholders with a combination of growing dividends and share repurchases while investing in growth initiatives. The company’s smokable products segment, anchored by the resilience of the Marlboro brand, is poised to deliver solid operating company income (OCI) growth. In addition, its moist smokeless tobacco (MST) brands within the oral tobacco segment remain a key driver of profitability.

Altria’s diversified product portfolio and focus on operational efficiency position the company to deliver profitable growth while enhancing shareholder value. In August, Altria raised its dividend by 4.1%, marking the 59th increase in the last 55 years — a reflection of its long-standing commitment to rewarding investors. This trend is expected to continue, as the company is well-positioned to expand its earnings base and pay even higher dividends in the years ahead.

With a strong balance sheet, significant financial flexibility, and a focus on cost savings, Altria is in a favorable position to repay debt and continue delivering cash to shareholders. The company has set a progressive dividend goal, targeting mid-single-digit growth in dividends per share annually through 2028. This will be supported by a growing earnings base, with Altria projecting a mid-single-digit annual increase in its adjusted earnings per share (EPS) during the same period.

A key driver of Altria’s future growth is its expanding U.S. smoke-free business, which is expected to accelerate earnings. The company plans to nearly double its U.S. smoke-free net revenues to $5 billion by 2028, up from $2 billion in 2022, with a significant portion of that coming from innovative smoke-free products. This growth in high-margin products is expected to significantly bolster Altria's earnings in the coming years.

In addition to its product diversification, Altria focuses on operational efficiency by centralizing work, standardizing processes, and leveraging artificial intelligence (AI) and automation.

While Wall Street analysts rate Altria as a “Hold,” the stock remains an attractive option for income investors. With a robust dividend growth history, a strong yield of 7.75%, and a growing earnings base, Altria is a top high-yield dividend stock for 2025..

Dividend Stock #2: Energy Transfer

Energy Transfer provides transportation for crude oil (CBG25), natural gas (NGF25), natural gas liquids (NGL), and refined oil and gas products. The company is also engaged in NGL storage and fractionation services. Its extensive portfolio of pipelines and energy assets spans every major supply basin in the U.S., positioning it well to capitalize on domestic demand and export opportunities.

The company’s diversified operations and high-quality assets generate strong, predominantly fee-based earnings, offering a buffer against commodity price volatility and ensuring financial stability.

Energy Transfer will likely benefit from organic project development and strategic acquisitions in the coming years. Further, approximately 90% of its earnings come from fee-based contracts, a model that ensures predictable cash flows. These strengths position the company to deliver shareholder value through sustained dividend growth.

Energy Transfer has a solid record of consistent dividend payments and increases. These payouts reflect the strength of its assets, its diverse geographic footprint, and its wide range of product offerings. Management remains optimistic about the growing demand for its services domestically and internationally.

The company is uniquely poised to benefit from rising energy demand, particularly in natural gas. The expansion of AI data centers and power plants has driven increased utilization across its natural gas pipelines. With its extensive infrastructure, Energy Transfer is well-positioned to capitalize on these trends.

Furthermore, Energy Transfer maintains a solid liquidity position and a strong balance sheet. This financial foundation allows it to fund organic growth initiatives while simultaneously reducing leverage.

Looking ahead, the company anticipates annual distribution growth of 3%-5%, further increasing its appeal as a reliable income-generating stock. Moreover, it offers a compelling yield of 6.67%.

Analysts are bullish on Energy Transfer stock and maintain a “Strong Buy” consensus rating. This further supports its bull case and makes it one of the top dividend stocks for 2025.

On the date of publication, Sneha Nahata did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.

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