rtmark
LearnBonds.com

Will Chesapeake Energy be the first casualty of the oil price war?

Chesapeake Energy (NYSE: CHK) is among the most at threat oil & gas companies as plunging oil prices are likely to create bankruptcies and debt restructurings amid the sector. The Oklahoma City-based shale oil and gas producer has seen its stock plunge by 81% in the last 90 days to 17 cents on Monday morning.

While oil prices moved back to $30 range following US President Donald Trump’s pledge of taking all the necessary actions to save the US oil and gas industry along with the reports of a potential deal between Saudi Arabia and Russia, market analysts are still concerned over the demand for oil.

Oil prices dropped more than a half in the last year amid increasing supplies from the top three largest producers that include Saudi Arabia, Russia, and the US. At the same time, the spread of coronavirus around the world has cut deep into global oil demand.

Will Chesapeake Energy be...

“I think the whole market understands that the deal between Saudi Arabia and Russia is important… and to bring stability in a world that is about to see probably the greatest recession ever,” Kirill Dmitriev, chief executive of Russia’s sovereign wealth fund RDIF.

Despite production cuts, the market analysts are forecasting further falls in the demand for oil. BofA analysts expect global oil demand to decline by 12 million barrels of oil a day in the second quarter for the year due to lockdown, while Goldman Sachs claims that oil demand dropped 25% last month.

“This shock is extremely negative for oil prices and is sending landlocked crude prices into negative territory, while waterborne grades such as Brent will be far more insulated, staying near cash costs of a $20 barrel of oil with temporary spikes below,” Goldman says.

Chesapeake Energy, led by chief executive Doug Lawler, has seen its stock price crash close to 94% in the last twelve months due to its high breakeven point and a massive debt load with $192m of the bond is due in August, the total debt load stands around $9bn.

Trusted & Regulated Stock & CFD Brokers

Rating

What we like

  • 0% Fees on Stocks
  • 5000+ Stocks, ETFs and other Markets
  • Accepts Paypal Deposits

Min Deposit

$200

Charge per Trade

Zero Commission

Rating

64 traders signed up today

Visit Now

75% of investors lose money when trading CFDs.

Available Assets

  • Total Number of Stocks & Shares5000+
  • US Stocks
  • German Stocks
  • UK Stocks
  • European
  • ETF Stocks
  • IPO
  • Funds
  • Bonds
  • Options
  • Futures
  • CFDs
  • Crypto

Charge per Trade

  • FTSE 100 Zero Commission
  • NASDAQ Zero Commission
  • DAX Zero Commission
  • Facebook Zero Commission
  • Alphabet Zero Commission
  • Tesla Zero Commission
  • Apple Zero Commission
  • Microsoft Zero Commission

Deposit Method

  • Wire Transfer
  • Credit Cards
  • Bank Account
  • Paypall
  • Skrill
  • Neteller

Rating

What we like

  • Sign up today and get $5 free
  • Fractals Available
  • Paypal Available

Min Deposit

$0

Charge per Trade

$1 to $9 PCM

Rating

Visit Now

Investing in financial markets carries risk, you have the potential to lose your total investment.

Available Assets

  • Total Number of Shares999
  • US Stocks
  • German Stocks
  • UK Stocks
  • European Stocks
  • EFTs
  • IPOs
  • Funds
  • Bonds
  • Options
  • Futures
  • CFDs
  • Crypto

Charge per Trade

  • FTSE 100 $1 - $9 per month
  • NASDAQ $1 - $9 per month
  • DAX $1 - $9 per month
  • Facebook $1 - $9 per month
  • Alphabet $1 - $9 per month
  • Telsa $1 - $9 per month
  • Apple $1 - $9 per month
  • Microsoft $1 - $9 per month

Deposit Method

  • Wire Transfer
  • Credit Cards
  • Bank Account
Users should remember that all trading carries risks and users should only invest in regulated firms. Views expressed are those of the writers only. Past performance is no guarantee of future results. The opinions expressed in this Site do not constitute investment advice and independent financial advice should be sought where appropriate. This website is free for you to use but we may receive commission from the companies we feature on this site.
Avatar

Based in Saudi Arabia, Siraj has a strong understanding of and passion for accounting and finance. He has worked for international clients for many years on several projects related to the stock market, equity research and other business, accounting and finance related projects. Siraj is a published financial analyst on the world's leading websites including SeekingAlpha, TheStreet, MSN, and others.