Energy Stocks Defy Oil Price Slide with Midstream Deals

Energy stocks bucked the trend on Wednesday, rising despite a slight dip in oil prices. The Energy Select Sector SPDR Fund gained 0.6% even as WTI fell 0.5% to $81.96 a barrel.

The divergence is due to the varied business models within the energy sector. Pipeline and midstream companies, such as Enbridge, often earn fee income based on volumes and contract terms rather than oil prices. This is why Enbridge rose 1.2% after agreeing to buy Salt Creek Midstream's crude gathering business for $600 million.

The deal highlights how some energy stocks can move independently of oil prices. The midstream assets tend to trade with a lower day-to-day sensitivity to oil prices, making them more resilient even when crude is weak.