High Yield Energy: Midstream Model Book Update

Research evidence excerpt

High Yield Energy: Midstream Model Book Update

J P M O R G A N North America Credit Research

21 July 2026

High Yield Energy

Midstream Model Book Update

Tarek Hamid AC

(1-212) 834-5468

tarek.x.hamid@jpmorgan.com

Aaron Rosenthal, CFA

• What we do in life echoes in eternity. The Midstream subsector has (1-212)aaron.rosenthal@jpmorgan.com270-4584

outperformed HY Energy over the last three months, which included a

Nevin Mathew ceasefire and subsequent return to actual conflict in the Middle East. High

(1-212) 834-5714

Yield Midstream spreads are now 44bp inside the High Yield Energy Index, but nevin.mathew@jpmchase.com

we continue to prefer the Midstream names compared to the E&P subsector

Elle Boyd

given both the higher ratings quality of the subsector and lower commodity (1-212) 270-7283

price exposure given the potential for a peace-driven downturn in crude prices. elle.boyd@jpmchase.com

Moreover, we maintain a preference for LNG names within midstream as the J.P. Morgan Securities LLC

risk to global LNG pricing appears skewed to the upside. Our commodity

strategists estimate that Qatar could reach full storage capacity in the next 2-3

weeks, which would potentially force production to shut down again or drop

materially. A shutdown would delay a full restart of Qatar LNG production by

2-3 months, which would put us in the middle of winter (Global LNG Supply

& Shipping Tracker: Qatar’s winter supply clock starts to tick, Otar

Dgebuadze). That is particularly important considering European natural gas

storage levels are at seasonal lows.

• Let us pretend that you are a loving daughter, and I am a good father. The

US volumetric outlook is positive for both crude and natural gas. US crude

production is approaching all-time highs despite producers being somewhat