Chesapeake Energy Corp (CHK)

[LouisDesyjr]

The laughter will turn to tears soon

CHK is up today because the muppets all think the deal means a price cut. They do not understand that the deal is not a cut, it is a freeze at already record levels of production. The news stories were not clear on this point and made it sound like the agreement was a cut in production with the headlines, instead of a freeze with a surplus of 1 million to 2 million barrels per day.

OPEC may freeze at January 2016 record output levels, but Iran is objecting:
https://finance.yahoo.com/news/four-oil-producers-agree-freeze-091449519.html#

news that Qatar, Saudi Arabia, Russia and Venezuela would lead an effort to freeze output at January levels, dashing hopes of a cut in production.

The world was still swimming in 1-2 million extra barrels of oil a day, he added.

The oil market already corrected and lost all of the early gains, probably because people that trade in those markets have a better understand of what is going on.

See chart from,
Crude Crashes 8% From OPEC "Cut Hope" Highs On Storage Concerns:
http://www.zerohedge.com/news/2016-02-16/crude-crashes-8-opec-cut-hope-highs-storage-concerns

I hope that you are being disingenuous and do not really think that anything has change for the eventual outcome of CHK. The only thing a spike in the price of common shares does is give people the change to buy put options, with the expectation that there is a bankruptcy at some point in the future.

Louis J. Desy Jr.

Image from www.zerohedge.com showing trading in oil earlier today: