It turns out, contrary to the prevailing wisdom a  month ago, that the midstream energy sector is not quite dead. The Alerian MLP Index is up 33% since Feb. 11, in what’s already been the longest relief rally since the collapse began last summer.

No one is in the mood for any victory laps while the 18-month chart still looks like this:

And that may be the single most bullish factor for the near future, because with crude up 50% over the last five weeks that source of recent outperformance looks played out for now.

But WTI at $40 is more than a temporary reprieve. It’s a reminder that over the longer term commodity prices will trend toward levels that will allow the most efficient producers to at least get by, if not  exactly live it up. It’s also an excellent opportunity for all drillers to sell more equity and add oil price hedges, steps that will tend to moderate the coming declines in domestic output.

The most useful thing an investor can do in times like these is to maintain perspective. The action of the past month is not the start of straight-up levitation to old highs, but neither are we particularly likely to revisit the recent lows. The sensible bet is on less excitement than in the recent past. And, boy, could we all use some boredom.

Midstream is certainly not out of the woods. Producer bankruptcies, which threaten long-term shipping and processing contracts, are a real threat, albeit one not nearly as pervasive as recent reports might lead one to believe. This month’s In Focus feature explains why that danger looks exaggerated.

Similarly, the recent convertible offering from Energy Transfer Equity (NYSE: ETE) underscores its struggle with debt leverage ahead of the Williams (WMB) acquisition and highlights a serious conflict of interest for insiders. But, as noted in News and Notes, these risks already appear to be discounted in the vastly reduced price of these companies’ equity.

That’s not a call for letting everything ride. Portfolio Update upgrades recent Holds DHT Holdings (NYSE: DHT), Genesis Energy (NYSE: GEL) and Scorpio Tankers (NYSE: STNG) to Buy because their muted rebounds continue to underestimate these businesses’ fundamental strength.

Conversely, we’re exiting Global Partners (NYSE: GLP) because the recent distribution cut does not appear to mark the end of its troubles, and Targa Resources (NYSE: TRGP) because it’s outrun its fundamentals.

We do have a New Buy in Enviva Partners (NYSE: EVA), a risky but promising supplier of wood pellets to European power plants. It’s a fast-growing leader of an emerging industry with plenty of momentum. There are not a lot of MLPs matching that description.

Portfolio Update

• Capital Products Partners (NASDAQ: CPLP) downgraded to Hold in Aggressive Portfolio
• DHT Holdings (NYSE: DHT) upgraded to Buy below $8 in Aggressive Portfolio
• EQT Midstream (NYSE: EQM) upgraded to Buy below $80 in Conservative Portfolio
• Enviva Partners (NYSE: EVA) added to Aggressive Portfolio; buy below $23
• Genesis Energy (NYSE: GEL) upgraded to Buy below $35 in Growth Portfolio
• Global Partners (NYSE: GLP) downgraded to Sell in Growth Portfolio
• Scorpio Tankers (NYSE: STNG) upgraded to Buy below $8 in Aggressive Portfolio
• Targa Resources (NYSE: TRGP) downgraded to Sell in Aggressive Portfolio
• Targa Resources Partners (NYSE: NGLS) removed from Growth portfolio following merger with sponsor Targa Resources (NYSE: TRGP)