But it’s also down more than 60 percent from its 2020 high near $34. This may give it more upside potential as the economy reopens from coronavirus.
The oil market is at an interesting crossroads because production is plunging at the same time consumption is set to increase. The Baker Hughes rig count has dropped for 11 straight weeks and is now at the lowest level more than 80 years of history. Global drillers represented by OPEC+ have also shown a commitment to production cuts – at least for now.
APA could be interesting technically and fundamentally. Technically, it’s made a series of higher lows while staying under roughly $13.50. That’s the bottom of its gap from March 9, when coronavirus really slammed the entire energy sector.
Fundamentally, APA is also in the process of a turnaround as management shifts from struggling operations in Texas to newer fields off the coast of Suriname. Traders may want to build positions around these levels and look for the to hold, followed by a potential gap fill. Today’s low could be a price level for risk management.