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Chesapeake Energy Stock: Will the Upward Movement Continue?

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Chesapeake Energy Stock: Will the Upward Movement Continue? PART 1 OF 4

What to Expect from Chesapeake Energy Stock

Chesapeake Energy stock

Chesapeake Energy (CHK) stock saw upward movement last week. The stock rose ~12% in the week ending September 18, 2017. However, the stock continued to trade at lower levels compared to the beginning of the year.

Since the beginning of the year, Chesapeake Energy’s stock has fallen 41.5%.

What to Expect from Chesapeake Energy Stock

The uptrend in Chesapeake Energy’s stock price last week was driven by improved crude oil (DBO) and natural gas (UNG) prices.

In the week ending September 18, crude oil prices rose 3.8%, while natural gas prices rose 6.6%. Improved energy prices also pushed the Energy Select Sector SPDR ETF (XLE) higher. XLE rose 1.7% during the same period.

Crude oil prices recovered following news that refineries processed higher volumes of crude oil after Hurricane Harvey. In late August 2017, Hurricane Harvey hit Texas and Louisiana. The hurricane took a toll on the Gulf Coast refineries and idled production in regions like the Eagle Ford and the Gulf of Mexico. There’s a high possibility that Chesapeake Energy’s Eagle Ford production could be impacted in 3Q17. Investors will be watching how the production impacts the company’s 3Q17 earnings and stock movements in the coming months.

To learn more about why crude oil prices rose last week, read How Major Oil Producers and the Dollar Are Driving Crude Prices.

Energy investors will also be watching to see if the increase in energy prices is sustainable.

Chesapeake Energy had been focusing on oil-targeted production growth this year. So, the direction that crude oil prices take will be crucial for the company.

As you can in the above graph, Chesapeake Energy stock and XLE performed poorly compared to the broader market. The SPDR S&P 500 ETF (SPY) has risen ~11% since January. The energy sector accounts for ~6% of SPY, while Chesapeake Energy accounts for ~0.50% of XLE.

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