Energy prices surged again on Monday, April 18th, sending traders into numerous names. Among the most active were volatile small-cap stocks and penny stocks that have become well-known for their exaggerated performance over the last few months. Thanks to the onset of global supply shortages stemming from the pandemic, the oil and gas industry was already in a stranglehold. With the Russia-Ukraine conflict, energy prices have continued rising exponentially.
What’s driving the sentiment in the stock market today? Recent comments from OPEC Secretary-General Mohammed Barkindo may have been one of the catalysts for the explosive move in energy prices. He remarked that “Considering the current demand outlook, it would be nearly impossible to replace a loss in volumes of this magnitude.”
The European Union relies heavily on Russia for roughly 25% of its oil imports. A recent ban on Russian coal and a potential embargo on Russian oil has put pressure on the EU to find alternatives. Barkindo also told Bloomberg that the highly volatile market also involves political factors which are “non-fundamental” and “totally out of our control at OPEC.”
Natural Gas Prices Surge On Monday
The price of natural gas has exploded to its highest levels since the financial crisis. In addition, the current weather patterns have also impacted natural gas prices. The United States east coast is bracing for heavy precipitation, including heavy snow.
In fact, EBW Analytics mentioned a “bullish weather shift” as a catalyst to send the U.S. market into “overdrive,” per CNBC. “With momentum firmly bullish and the market ill-equipped to handle any further bullish shocks, notable continued gains for natural gas remain likely this summer,” explained the firm.
Meanwhile, the United States has continued sending large amounts of liquified natural gas (LNG) to the EU, which has also strained the energy supply chain. With this backdrop, energy stocks are on the move, but none more aggressively than small-cap stocks.
Small-Cap Energy Stocks To Watch
Whether it’s stocks over $5 or energy penny stocks under $1, the trend is a sweeping one. Popular names including Indonesia Energy (NYSE: INDO), Houston American Energy (NYSE: HUSA), TechnipFMC Plc (NYSE: FMC), Southwestern Energy (NYSE: SWN), Kosmos Energy Ltd (NYSE: KOS), and Crescent Point Energy Corp. (NYSE: CPG). We’ve also seen a slew of energy penny stocks heating up during the mid-day session on Monday including:
- Camber Energy (NYSE: CEI)
- Imperial Petroleum Inc. (NASDAQ: IMPP)
- Transocean Limited (NYSE: RIG)
- Gran Tierra Energy (NYSE: GTE)
- Nordic American tankers Ltd. (NYSE: NAT)
- Enservco Corporation (NYSE: ENSV)
- W & T Offshore Inc. (NYSE: WTI)
- US Well Services Inc. (NASDAQ: USWS)
- Evolve Transition Infrastructure (NYSE: SNMP)
- Transglobe Energy Corp. (NASDAQ: TGA)
Clearly, the focus is on the energy sector and its recent string of volatility. Some sessions have seen many of these stocks explode hundreds of percentage points between open and closing bells. They’ve also shown that “stonks” don’t always go up. This was demonstrated in the crushing drops experienced by some of these in the last few weeks.
Why Are Energy Stocks Up & Will They Keep Going Higher?
Energy stocks are up today thanks to growing concerns about the global energy supply chain. With continued aggression between Russia and Ukraine spurring sanctions on oil and other resources, world trade has been upended with no immediate solutions at the forefront. As this remains a volatile situation for energy supply so too does that translate to energy stocks. If you are looking for small-cap oil and gas stocks to buy, make sure you’ve got an understanding of the current market dynamics at play.
