Camber Energy Inc (NYSEAMERICAN: CEI) is having an overwhelmingly rough start to the trading session in the pre-market hours this morning, and for good reason. The company is focused in the oil and energy sector, a sector that recently received news that drove the price of oil down. Of course, the news upset investors who are sending the stock down as well. Today, we’ll talk about:
- The issues sending CEI downward;
- what we’re seeing from the stock; and
- what we’ll be watching for ahead.
CEI Falls On Oil Price Blues
As mentioned above, Camber Energy is having a rough start to the trading session. However, they are not the only one. In fact, others like Chesapeake Energy (CHK) and Whiting Petrolium (WLL) are feeling the pain as well. Ultimately, these companies are reeling as the price of oil falls. Of course, oil is the key commodity in the energy sector. So, when oil falls in price, we tend to see a systemic change in the energy sector as a whole.
Ultimately, there are two big issues hitting CEI, CHK, WLL and others in the industry. These include:
- OPEC Increasing Output – At the moment, OPEC, the world’s leading oil cartel, is in the process of increasing oil production. As a result, stronger supplies should draw the price of oil downward as the law of supply and demand suggests.
- US Oil Inventories – Another factor hitting CEI and others pretty hard today has to do with American stockpiles of crude oil. The American Petroleum Institute recently reported a crude oil inventory build of 5.59 million barrels in the United States in the week ending July 28th. Analysts expected that the crude oil inventory in the United States would decline by 2.794 million barrels. So, the higher than expected supply is also driving prices down.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to dig into the market is that the news causes moves. In the case of Camber Energy, the news was not company specific, but it was negative. After all, the company makes its money with oil as a product. Therefore, if market prices of oil drop, the company simply can’t produce as much profit. So, it comes as no surprise that with the declines that we’re seeing in oil, we’re also seeing declines in the stock. Of course, our partners at Trade Ideas were the first to alert us to the gains. Currently (8:11), CEI is trading at $0.40 per share after a loss of $0.015 per share or 3.68% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on CEI. In particular, we’re interested in following the story surrounding oil supplies and production both from OPEC and the United States as changes here could dramatically affect the price of oil. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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