Magellan Midstream raises cash flow, profit estimates on higher prices

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A sticker reads crude oil on the side of a storage tank in the Permian Basin in Mentone, Loving County, Texas, U.S. November 22, 2019. REUTERS/Angus Mordant//File Photo

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HOUSTON, May 5 (Reuters) - Magellan Midstream Partners LP (MMP.N) on Thursday raised its cash flow and profit forecasts for this year as it expects higher oil and products prices to lead to increased flows in its pipelines.

Pipeline companies are expected to see higher transportation volumes as producers ramp up output at $100 a barrel.

Plains All American (PAA.O) on Wednesday raised its profit forecast for the year, saying higher oil and gas prices are expected to boost production and volumes shipped on pipelines from the top U.S. Permian shale field.

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Magellan increased its guidance for cash available for distribution to its unit holders by $15 million to $1.09 billion for 2022 and said net income would be 3.6% higher at $4.35 per unit.

The company said it shipped 11% more crude oil through its pipelines at 46.5 million barrels in the first quarter, while shipments of products declined 10%.

Overall net income fell 25% to $166 million for the first quarter, primarily due to hedging positions in place and as the pipeline operator saw a boost in the year ago quarter from winter storms.

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Reporting by Arathy Somasekhar in Houston; editing by Jason Neely and Barbara Lewis

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