3 Penny Stocks To Buy Or Sell After Saudi Oil News?

Penny stocks have taken center stage as broader markets continue to see volatility. The energy sector is the latest to see market momentum and global events have helped spur this move.

Saudi Arabia is one of the biggest producers of oil in the world and one of the biggest suppliers to the United States. However, the drone attack on Saudi Arabian oil facilities on Saturday landed the world oil markets into turmoil. This has resulted in soaring oil prices all over the globe.
The situation knocked off a large chunk of the global oil supply and oil prices soared by as much as 19% at one point. However, the turmoil in the oil markets has also provided an opportunity to enterprising investors to make money with penny stocks. In that regard, investors seemed to have moved quickly.

Penny Stocks To Buy Or Sell – Energy Sector

The massive rise in the price of oil has resulted in significant gains in offshore drilling stocks and from among those; some of them could be classified as penny stocks. Some of the oil and gas stocks that have experienced impressive gains yesterday include:

• Denbury Resources Inc. (DNR Stock Report) soared 28%; Down 8% Tuesday
• Nabors Industries Ltd (NBR Stock Report) was up over 18%; Down 9% Tuesday
• Torchlight Energy Resources, Inc. (TRCH Stock Report) gained 9%; Down 1% Tuesday
• Offshore drilling company Seadrill (SDRL Stock Report) managed to gain as much as 6.60% as the price of oil started rising globally; Down 7% Tuesday

However, the question remains whether this rally in oil can continue and for now that answer is No for these penny stocks to watch. Furthermore, can it remain an active industry to fuel future gains for sector stocks? In this regard, it should be noted that the state-owned oil producer Saudi Aramco has already closed as much as 50% of its production facilities at this point. But breaking news on Tuesday suggested that Saudi oil output could return to normal faster than originally expected.

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Therefore it was good news for oil drilling companies on Monday but not so much on Tuesday. The rewards for these companies could be enormous in such a situation, but it is important to note that companies are unlikely to expand their drilling activities. So, the gains from investing in these companies might not be as big as expected.

Penny Stocks & Global Events

Typically, global events like this tend to ripple across all price levels of the stock market. Penny stocks typically reacted in a much more volatile fashion than larger energy stocks. For this reason, it’s important to keep track of the day to day sector news. And this is exactly what we’ve done today after seeing these latest reports spiral oil stocks downward.

Though it may appear favorable one day, it can literally turn bearish within a 12-hour span. One piece of industry news suggesting increased output from somewhere in the world can trigger the opposite reaction from the oil market. The oil and gas industry is fickle so it’s important to note when inventory reports are set to come out. Other factors – like the Saudi attack – can’t be planned but they are a factor due to the nature of the industry. These are key when it comes to picking penny stocks to buy or sell.

At the same time, when it comes to penny stocks to watch, volatile swings are expected, of course. But in the same light, a volatile industry paired with penny stocks can see an exponential level of bullish and bearish activity. With all of this in mind, it may be a sign of caution for energy penny stocks during the rest of this week.

* This article was originally published here