The energy stock may perform poorly due to the falling oil prices today.
Chesapeake Energy Corporation (NYSE:CHK) stock has performed well in the market since Election Day. The oil prices have also favored this as they have stabilized amid the recent discussions of OPEC to cut oil supply.
The oil prices have been falling today. It fell more than 1% on Friday and there are various reasons assigned to this development. One of the main reason attributed to this fall due to the strong dollar, which has reached levels as seen in 2003. A strong dollar means that the countries using other currencies make oil expensivefor themselves. This is a reason attributed by traders for Today’s fall.
International Brent Crude oil futures lost 1.4% as of 0650 GMT and were being traded at $48.31 compared to yesterday’s close. This occurred despite minimal activity over the Thanksgiving Holiday and before the weekend.
There are reports that the Saudi oil giant, Aramco, plans to increase the oil supply in January. OPEC members are due to meet on November 30 where they will decide the framework for the possible oil supply cut. The decrease in oil supply will only be applicable from February next year, as the exporters usually sell ahead two months in advance.
The shares of the energy giant closed after registering a 3.19% increase for the day. The prices stood at $6.64 on closing time on Wednesday.
The market prices have been increasing since Donald Trump won the presidential elections as his policies are seen to favor the non-renewable energy companies. The prices have also been following closely the trend of the oil prices. The fall in oil prices today may lead to a fall in stock prices for Chesapeake Energy.
The Street has majorly held a bullish stance on the energy stock. Research firms, such as KLR Group, Wunderlich, and SunTrust Banks, issued a Buy rating for the stock. The consensus price target stands at $7.34 depicting an upside potential of 10.52% over the last close.