Camber Energy CEI Stock News

After rallying in the market yesterday, Camber Energy Inc (NYSEAMERICAN: CEI) is taking a bit of a hit from profit-takers today. In fact, early on, the stock is trading on losses of more than 8%.

While these declines are concerning to some, in my view, they are only opening the door to a potentially lucrative opportunity. Here’s my view on CEI stock:

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The Past Weekend Changed The Game In Oil

First and foremost, it’s important that you understand the reason for the rally in Camber Energy shares yesterday. While the company didn’t release any news, stocks across the oil and energy industry rocketed following a weekend attack on a large oil facility in Saudi Arabia.

The facility was responsible for the production of about 5 million barrels of oil per day, the largest of its kind in the region. Unfortunately, due to a drone attack on the facility that was later claimed by Yemen rebels, the facility is now completely off of the grid.

Due to ties between Iran and the rebels involved in the attack, further geopolitical concerns hit the tape, leading to substantial gains in the value of oil. Of course, stocks like CEI, CHK, YUMA, and several others found their way to the top on the news.

Why CEI Stock Is Falling Today

Although declines of more than 8% can indeed be concerning, I don’t believe that there’s much to be concerned about here. First and foremost, take a look at what CEI does.

The company is centered around the oil industry. Not only does it produce oil, the company’s recent acquisition of Lineal Star makes it a pipeline construction and maintenance service as well.

With about 5% of the global oil production capacity taken offline, companies across the world will be working to fill this gap. While we await the recovery, oil prices are likely headed up on supply blues.

Of course, as oil companies continue to work to fill in the $5 million barrel per day hole, service demand for those provided by Lineal Star will likely increase, leading to a stronger revenue opportunity for CEI.

It’s also important to keep the geopolitcal concerns in mind here. Who’s to say that another attack on a large facility won’t take place, or this won’t be the straw that breaks the camel’s back, leading to a war between the US and Iran. Geopolitical uncertainty is scary, but it can lead to dramatic gains in the value of oil. Of course, as the commodity climbs, so too will CEI and like investments.

Why Is CEI Falling

So, if things are so great, why is the stock headed down today? There’s a simple explination… profit taking. At the end of the day, Camber Energy shares had a great day yesterday. It’s not uncommon for traders to take profits after compelling runs.

So, profits are being taken today. Nonetheless, the long term outlook for the oil industry and likely increasing demand for pipeline construction makes CEI a hard stock to ignore!

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