Weak Energy Prices Dragged Down the Energy Sector, Including CHK



Chesapeake Energy’s stock performance

Chesapeake Energy (CHK) had started 2016 on a bad note. In early February 2016, CHK fell ~62% on reports that the company was looking to restructure its ~$10 billion debt load.

Chesapeake Energy has since made it out of those volatile times. This was possible due to calculated and strategic steps taken by CHK to reduce its debt last year, asset sales, and improvement in energy prices.

Last year’s rally slowed down in 2017 as the stock has taken on a downtrend, mirroring energy prices (USO) (UNG) for the most part.

In the three months since November 2016, CHK stock has risen ~9%, and natural gas prices (UNG) have risen 17% during the same period. However, since January 2017, CHK has fallen ~9%. Natural gas prices and the Energy Select SPDR ETF (XLE) fell 5.6% and 4.5%, respectively.

Article continues below advertisement

In comparison, the broader markets have performed relatively well since January 2017. The SPDR S&P 500 ETF (SPY) (SPX-INDEX) rose ~2.4%. The SPDR Dow Jones Industrial Average ETF (DIA) (DJIA-INDEX) rose 1.7%, while the Fidelity NASDAQ Composite Index ETF (ONEQ) (COMP-INDEX) rose 5.6% during the same period.

On a year-over-year basis, Chesapeake Energy (CHK) stock has risen ~224%. Natural gas prices rose ~50% and XLE rose 34%, respectively, during the same period.

Please read How Will Chesapeake Energy’s Stock Perform this Year? to learn more about Chesapeake Energy’s stock performance trends.


More From Market Realist