Why Units of Energy Transfer Surged Nearly 12% in January

Core Insights - Energy Transfer's unit price surged 11.9% in January 2026, significantly outperforming the S&P 500's 1.4% gain [1] - The surge was driven by rising crude oil prices and the company's positive outlook for 2026 [1][6] Oil Price Impact - WTI crude oil prices increased by 14% in January, marking the first monthly gain in six months, influenced by potential supply issues in Venezuela and Iran [4] - Although oil prices impact only 5% to 10% of Energy Transfer's earnings, higher prices can boost those earnings and incentivize increased production, enhancing the company's volumes and growth prospects [5] 2026 Outlook - Energy Transfer expects adjusted EBITDA for 2026 to be between $17.3 billion and $17.7 billion, reflecting a growth rate of 7.5% to 10% from last year's $16.1 billion, a significant acceleration from less than 4% growth in 2025 [7] - The company anticipates benefits from several expansion projects, including the Nederland Flexport NGL expansion and gas pipeline projects for Texas data centers [7] Capital Investment and Growth - Energy Transfer plans to invest between $5 billion and $5.5 billion in growth capital projects this year, up from $4.6 billion last year, primarily to enhance its gas pipeline network [8] - The company is also exploring opportunities to meet the growing power demand from AI data centers [8] Cash Distribution - The company has raised its cash distribution by more than 3% over the past year, aligning with its long-term target of 3% to 5% annual distribution growth [9]