Chesapeake Energy Corporation (NYSE: CHK)
Chesapeake Energy had a rough start to the day today. As soon as the market opened, the stock started finding its way to the red. Throughout most of the morning, we saw steady declines, bringing the stock lower and lower. Nonetheless, it seems as though investors have come to their senses over the past hour or so, and the stock is nearing the green again. Below, we'll talk about what we're seeing in the market, why, and what we'll be watching for with regard to CHK.
What We're Seeing From CHK
As mentioned above, Chesapeake Energy wasn't off to the best of starts in the market today. When the opening bell rang, the stock quickly started making its way downward. Throughout most of the morning, we saw a continuation of downward movement. However, as we transition into the afternoon, we're seeing an incredibly quick recovery. At the moment (12:08), CHK is trading at $7.33 per share after a loss of $0.02 per share (0.27%) thus far today.
Why The Stock Is Heading Upward
As usual, as soon as the CNA Finance team was notified by our partners at Trade Ideas that CHK was making a run toward the top, we started to dig to see what was going on. The truth is that there hasn't been any fundamental news released today. However, yesterday's news led to strong gains. From there, we saw an early morning correction followed by investors thinking, “OK, time to bring it back to the green.”
The truth is that there's a good reason for the gains. OPEC recently announced an agreement that cuts 1.2 million barrels of oil from global production daily. Yesterday, news broke that Russia, Mexico, and other non-OPEC nations also reached an agreement. These countries are cutting around 550,000 total barrels of oil from global production daily. With these cuts, oil is likely to head upward in value ahead. Ultimately, CHK and others that make their money in the industry will likely see further gains.
What We'll Be Watching Ahead
Moving forward, the CNA Finance team will be keeping a close eye on CHK and others in the oil industry. With so much oil being cut from global production, we could see incredible opportunities ahead. We'll also be keeping an eye on global supply and demand data. Many argue that the supply glut is still larger than demand, even after the cuts. However, the data will settle the argument soon enough. Nonetheless, we'll keep an eye on the news and bring it to you as it breaks!
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