Feb 24, 2021 (Penny Stocks via COMTEX) -- Are These 5 Energy Penny Stocks Worth Watching This Month?
Over the course of the past year, energy penny stocks have become more popular than usual. To understand why, let's start back in January of last year. When the pandemic hit, the energy industry and corresponding penny stocks all took a major dive. As the months rolled on, oil and gas demand was low but quickly began to climb.
As we all know, energy penny stocks tend to move with the price of oil, gas, and alternative energy as well. A lot also has to do with virus case numbers. If fewer people are getting sick, more people are willing to travel and go to work. This means that the energy demand could increase. So, here we are, around a year after the pandemic began. Now, we slowly see the production of oil begin to creep back up. Additionally, there are a few factors that are affecting the short-term trajectory of the energy industry.
For one, oil prices are up by as much as 24% since the start of the year. In mid-February, oil prices hit a high of around $60.77, which is its highest since January 2020. In the U.S., most oil and gas production is located in areas where snowfall can be common. This means that production may slow as large winter storms hit the U.S. When supply is lower, oftentimes, demand will go up, thus increasing prices.
Andy Lipow, an analyst for the oil industry, stated that "frigid weather means that many oil wells may be shut-in. Water is produced along with oil, that water can freeze up equipment."
This sentiment shows that there may be some near-term production issues in the U.S. Obviously, it will take some time before the industry can fully recover. But in the meantime, here are five energy penny stocks to watch.
Energy Penny Stocks to Watch
Torchlight Energy Resources Inc. ( NASDAQ: TRCH )
Epsilon Energy Ltd. ( NASDAQ: EPSN )
Tellurian Inc. ( NASDAQ: TELL )
Peabody Energy Corp. ( NYSE: BTU )
Centennial Resource Development Inc. ( NASDAQ: CDEV )
Torchlight is a company that we've been talking about for several months at this point. In that time, shares of TRCH stock have had multiple days of double-digit percentage gains. This includes the almost 50% gain it took in on Friday, February 12th. Only a month ago, shares of TRCH were trading under $1.40. Also, the volume for TRCH has spiked tremendously. On an average day, TRCH trades around 9 million shares.
However, on Friday, that number jumped to over 75 million for the day. This is a massive spike and also helps to illustrate just how volatile TRCH can be. So, what exactly does Torchlight do? Well, the Plano, Texas-based company was involved in the exploration of oil and natural gas reserves. But that has since changed in a big way with the recent pending merger with Metamaterial.
While oil and gas may be popular, so is alternative energy. The deal with Metamaterial would turn Torchlight into a company that focuses on clean technologies, including solar power. Recent news of Torchlight's latest financing round has sparked further interest in the company. Torchlight said it intends to use the net proceeds for general business purposes and provide $5 million of additional bridge financing to Metamaterial Inc. in connection with the combination with Meta. TRCH stock continued surging during after-hours trading on Friday, climbing as high as $3.82 before the final close.