Monday, 7 December 2015

CHK, CNX, SDRL - energy stocks under severe pressure

With WTIC Oil seeing a severe net Monday decline of around -6%, most energy stocks were severely impacted. Chesapeake Energy (CHK), Consol Energy (CNX), and Seadrill (SDRL), settled lower by -6.4%, -15.0%, and -9.8% respectively. Current price action offers no sign of a short term floor.

CHK, daily

CNX, daily



*I could highlight a great many energy stocks, but for today.. the above 3 will have to suffice.

re: Oil. With OPEC completely abandoning any kind of supply ceiling.. never mind any actual cuts, the oil market continues to spiral lower.

For the moment, there is absolutely ZERO sign of a floor.

Naturally.. most energy related stocks are imploding, breaking new multi-year.. even multi-decade lows.

The energy sector is yet to see the capitulation that will be necessary for supply to balance against demand. Such capitulation will by definition require far more significant cuts... with some companies not surviving - as has been the case in the coal industry.