Declining energy prices, upcoming earnings pressure Chesapeake, Consol; AK Steel falls too

By Stephanie N. Rotondo

Seattle, Oct. 26 – Distressed commodity-linked names were getting weighed on amid a decline in energy prices Monday.

Looming earnings were also playing a factor.

“I think people are anticipating some weak steel and coal earnings,” a trader said.

A supply glut in both crude oil and natural gas put pressure on prices Monday, a trend that has been in place for the better part of a year. For its part, natural gas had its biggest one-day plunge since February 2014, due in part to temperatures that are expected to be warmer than average in the coming weeks. In oil, prices declined to a two-month low.

The weakening energy prices and upcoming financial results combined to create a down day for names like Chesapeake Energy Corp.

“They were getting beat up today,” a trader said, pegging the 5¾% notes due 2023 in a 63½ to 64 context. That was down from 67, he said.

The company will release its results next week.

As for coal, a trader said Consol Energy Inc.’s 5 7/8% notes due 2022 were “active” and down 1½ to 2 points “ahead of earnings.” The trader saw the issue closing around “71-ish.”

The company will release earnings on Tuesday.

Also slated for Tuesday are earnings from AK Steel Holdings Corp. The 7 5/8% notes due 2021 were down prior to the numbers, with a trader seeing the notes ending “close to 50.”

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