Although crude oil prices have been fluctuating recently on concerns about the changing supply environment, particularly OPEC’s plan to increase production over the next few months, oil demand is rising rapidly with the reopening of the global economy. Because energy usage is expected to regain pre-pandemic levels soon, master limited partnership Sunoco (SUN) could witness solid improvement in its financials. Thus, we think the stock could be a good bet now. Read on.Sunoco L.P. (SUN) is a retail motor fuel distributor across the U.S. The company operates as a Master Limited Partnership (MLP), a structure that is a hybrid of a limited partnership and public corporation. MLP companies resemble a limited partnership company, but their shares are traded on stock exchanges. Thus, SUN operates as a public limited company, but it is taxed as a partnership. This is immensely beneficial because MLPs are not required to pay corporate taxes on their operating profits.
Shares of SUN have gained 46.6% over the past year and 27.3% year-to-date. In addition, the stock gained 6.3% over the past five days.
As the economy regains pre-pandemic levels on a fast-paced vaccination program and federal rescue spending, demand for motor fuel is expected to rise substantially.