Chesapeake Energy (CHK) Stock Gains On Suprise Oil Draw

Chesapeake Energy Corporation CHK Stock News

Chesapeake Energy Corporation (NYSE: CHK) is making a run for the top in the market today, trading on gains of more than 6%. However, with no news or SEC filings hitting the tape, many are wondering why? The gains seem to be the result of a suprise drop in United States crude oil supplies. Here’s what’s happening:

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CHK Stock Gains On Crude Oil Draw

As mentioned above, Chesapeake Energy is having a great day in the market today. The gains seem to be related to a larger than expected drop in crude oil inventories in the United States.

IN the U.S., crude oil stockpiles fell by 3.5 million barrels in the weekn ended August 16th, according to American Petroleum Institute, or API, data. Analysts expected that crude oil inventories would fall, but only by 1.9 million barrels

U.S. crude oil stocks fell by 3.5 million barrels in the week to Aug. 16, data from industry group the American Petroleum Institute (API) showed on Tuesday. Analysts polled by Reuters had expected a fall of 1.9 million barrels. The larger-than-expected stockpile decline is leading to bullish opinions with regard to the energy sector and propping stocks like CHK up.

In a statement, Edward Moya, senor market analyst at OANDA, had the following to offer with regard to the draw:

Crude prices should see support from a bullish API stockpile report that could signal the largest Cushing draw since February 2018, if the EIA validates it.

More To Consider With Chesapeake Energy

Chesapeake Energy has been having a rough time in the market as of late. In fact, the stock recently hit a lower price than it had seen in around two decades.

Some argue that this is a gross undervaluation doing nothing more than presenting an opportunity. Recently, CHK has been working hard to reduce operational costs while increasing production. In fact, in the most recent quarter, the company hit record production, generating 122,000 barrels of oil per day.

As the company continues to invest in assets that will increase production and maintains a focus on financial discipline, many investors believe there’s a real opportunity for CHK to come off of recent lows in a big way.

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