EVs may be all the buzz as 2020 comes to a close, but that doesn’t mean it isn’t worth taking a look at the top oil penny stocks to watch.
With green energy stocks being some of the top penny stocks to watch in 2020, you may be thinking you should avoid oil stocks — and penny stocks at that … but you’d be wrong.
As a trader, you should always be prepared to take advantage of any opportunities the market may offer — no matter the sector or industry. There are still MANY exciting penny stocks in the oil sector to keep an eye on going into 2021.
Now, oil stocks did go through a major oil crash earlier this year. But they’ve started to rebound.
How big a rebound? In March 2020 the value of a barrel of U.S. benchmark crude oil fell below one cent. After the initial panic passed, the price climbed back up. And boy did it … It’s trading at about $45 a barrel as of mid-December.
The rebound brought along many small cap oil stocks as well. So which are worth watching?
Today, we’ll look at the top 10 oil penny stocks to watch.
(Want to know which hot stocks I’m watching every week? Sign up for my no-cost weekly watchlist here!)
Ready? Let’s go!
Table of Contents
- 1 Oil Penny Stocks: Why Trade Them?
- 2 Is Now the Time to Trade Oil Penny Stocks?
- 3 The Benefits of Trading Oil Penny Stocks
- 4 The Top 10 Oil Stocks to Watch
- 4.1 ProPetro Holding Corp. (NYSE: PUMP)
- 4.2 Helix Energy Solutions Group Inc. (NYSE: HLX)
- 4.3 Aemetis Inc. (NASDAQ: AMTX)
- 4.4 Clean Energy Fuels Corp. (NYSE: CLNE)
- 4.5 NextDecade Corp. (NASDAQ: NEXT)
- 4.6 Abraxas Petroleum Corp. (NASDAQ: AXAS)
- 4.7 VAALCO Energy Inc. (NYSE: EGY)
- 4.8 Exterran Corp. (NYSE: EXTN)
- 4.9 Southwestern Energy Co. (NASDAQ: SWN)
- 4.10 KLX Energy Services Holdings Inc. (NASDAQ: KLXE)
- 5 How to Trade Oil Penny Stocks
- 6 Tips for Trading Oil Penny Stocks
- 7 Is Trading Oil Penny Stocks Right for You?
- 8 Frequently Asked Questions About Oil Penny Stocks
- 9 One Platform. One System. Every Tool
Oil Penny Stocks: Why Trade Them?
After tanking earlier this year on pandemic news, oil stocks are beginning to recover.
Like any industry in 2020, oil stocks can be volatile. This is especially true for penny stocks…
With a vaccine rolling out and life returning to normal, expect demand for oil to increase.
That’s a big positive for smaller oil penny stock companies trying to make a name for themselves in the market. The higher the demand, the more business there is.
Is Now the Time to Trade Oil Penny Stocks?
To say the pandemic has had an effect on the market would be putting it mildly…
The pandemic has had a HUGE effect on the market. In fact, 2020 may be the craziest year in trading I’ve ever seen…
The uncertainty affected many industries — especially the oil industry. Oil demand is way down. More people are working from home instead of commuting to work. And travel is down — people aren’t taking as many trips as they used too.
Will the oil industry ever completely recover to pre-pandemic levels? Who knows … But there can still be an opportunity to trade oil penny stocks.
Especially as things start to return to normal…
The Benefits of Trading Oil Penny Stocks
As of now, our world runs on oil. Oil companies all around the world provide us with the services we need for society to function.
As the world reopens and people begin to go about their everyday lives as before, there could be an increase in oil demand.
That could benefit stocks in the oil and gas industry as well as oil stocks. It’s the perfect catalyst to keep an eye out for as we move into the new year.
Also, as more people turn to green energy, oil and gas companies have begun to take notice. Oil and gas companies are investing in green energy as well.
Higher demand for “green” products puts more pressure on companies to develop environmentally friendly products and technologies. Some have already started.
So with that being said, let’s get into it…
The Top 10 Oil Stocks to Watch
ProPetro Holding Corp. (NYSE: PUMP)
ProPetro Holding Corp. (NYSE: PUMP) is an American oil and gas company. It provides pumping and other services to the oil and gas industry.
Before the big oil dip in March, this stock was trading at around $20.
It hit a low of nearly $2.50 in March and has slowly begun to recover, now trading around $4.
Helix Energy Solutions Group Inc. (NYSE: HLX)
Helix Energy Solutions Group Inc. (NYSE: HLX) is an offshore energy company with operations in construction and maintenance services.
There have been some volatile price moves for this stock recently, but it’s been trading steadily at around $4 since October.
The company also recently started offering robotics operations to the offshore oil industry.
Aemetis Inc. (NASDAQ: AMTX)
Aemetis Inc. (NASDAQ: AMTX) specializes in refining oil and gas products, but its new subsidiary company made the leap into liquid gels and sanitizers amid the pandemic.
As we know, any pandemic-related news can make a stock run.
Trading at $2.25 in September, the stock rose to a high of $4 in December.
Clean Energy Fuels Corp. (NYSE: CLNE)
Clean Energy Fuels Corp. (NYSE: CLNE) produces renewable natural gas. It creates natural gas from decomposing organic waste, and doesn’t extract oil from the earth.
That’s pretty forward-thinking for an oil and gas company, in my opinion.
The stock has seen an 117% increase since December 2019, and it continues to climb.
NextDecade Corp. (NASDAQ: NEXT)
NextDecade Corp. (NASDAQ: NEXT) is a liquid natural gas developer. It packages and transports liquefied natural gas for export.
NEXT has seen lots of volume and volatility lately. Fluctuating from $1 to $4 in September, it currently sits in the mid $2s.
I’d say it’s definitely one to keep an eye on as economies reopen and demand for gas rises.
Abraxas Petroleum Corp. (NASDAQ: AXAS)
Abraxas Petroleum Corp. (NASDAQ: AXAS) is a Texas-based oil and gas exploration and production company.
As with the other oil penny stocks on this list, AXAS had a disappointing start to 2020. The oil crash in March didn’t help…
AXAS hit a low of $1.60 in November, but has since recovered and is now trading in the mid $2s.
VAALCO Energy Inc. (NYSE: EGY)
VAALCO Energy Inc. (NYSE: EGY) is another Texas-based energy company. They explore, develop, and produce oil and natural gas for export.
In November, the stock spiked from $1 to $1.77 and has never dipped below $1.45. As of this writing, EGY trades around $1.50 per share.
Exterran Corp. (NYSE: EXTN)
Exterran Corp. (NYSE: EXTN) supplies equipment to oil and gas companies.
EXTN has seen volatile price moves in the last year. After hitting a 52-week high in August at more than $8, the stock settled back down to the $3 area in November.
As of this writing, it’s trading above $4.50 and has been climbing in December.
Southwestern Energy Co. (NASDAQ: SWN)
Southwestern Energy Co. (NASDAQ: SWN) is an American natural gas and oil company involved in the exploration, development, and production of oil-based products.
In mid-November, the company said it expanded operations, buying oil and gas producer Montage Resources Corp.
SWN jumped from $2.40 at the beginning of November to $3.50 by mid-November. It’s now in the $3s.
KLX Energy Services Holdings Inc. (NASDAQ: KLXE)
KLX Energy Services (NASDAQ: KLXE) provides oilfield services to oil and gas companies. It focuses on intervention and production activities for oil wells throughout America.
KLX has over 40 facilities in the major oil-producing regions of the U.S.
The stock hit an all-time low of $3.25 in March, but has recovered nicely since, hitting a high of $9.30 in December and holding above $7 so far in the month.
How to Trade Oil Penny Stocks
Trading oil penny stocks is just like trading any other stocks. First, you’ll need a computer and an internet connection. Then you’ll need an online account with a brokerage.
There are many brokers to choose from, so make sure to do your research and make a decision on what works best for you. Here’s some advice that could help you make your choice.
Remember … don’t just trade stocks blindly and hope to pick a winner. Make sure to have a solid trading plan.
There’s no rush!
Tips for Trading Oil Penny Stocks
Use Trading Tools
Part of having the proper strategy is using the proper tools. New traders get to take advantage of today’s technology. There are so many tools available to help improve your trading skills. Not so long ago, it was a lot harder to get the job done.
And the trading tools could make or break your trading game.
When it comes to which software or trading platform to use, I don’t think you can do better than the StocksToTrade platform. It features some of the best trading tools available. I helped design it to fit my trading strategy.
It’s loaded with streamlined charts, scanners, watchlists, indicators, and more. These incredible tools are built in to help make the trading day easier. Try them out today — start your 14-day trial of StocksToTrade for just $7 now!
Stay Up to Date
Stocks, especially penny stocks, can be incredibly volatile.
Oil’s not in high demand right now due to the pandemic … but that could change soon.
That’s why it’s so important to stay up to date on the news. Every little piece of news could have a big effect on the market.
As a trader, you should always be always prepared to react. Be on the lookout for events, pandemic updates, business news, hot sectors, and other developments.
What do traders use to keep up with the news and find stocks that are about to SURGE? StocksToTrade’s new Breaking News Chat feature! Get breaking news early to find the hottest stocks to trade. Get your 14-day trial for $17 here!
Try Paper Trading
Paper trading is simulated trading. It’s a way for any trade to test out strategies and give trading a try without risking your money.
You don’t have to risk a cent. You can test your strategies and keep track of your progress before you even make your first trade.
Tracking your trades allows you to see your progress, view your past trades, wins/losses, strategies, and adjust your new and existing trading strategies accordingly.
It’s critical for improving your skills as a trader. And you can do it on StocksToTrade. Take a test drive of our platform with a 14-day trial for just $7.
Is Trading Oil Penny Stocks Right for You?
I can’t answer this question for you. The answer depends on you.
There could be some benefits to trading oil penny stocks, but it depends on what you feel comfortable with as a trader and your risk tolerance.
The good news is you don’t need a big account to get started. Since oil penny stocks are usually pretty cheap, even traders with small accounts can afford to trade them.
All you need is a laptop, an internet connection, and a brokerage account. Do your research, learn the patterns, study the charts, develop your strategy, and find what works best for you.
Frequently Asked Questions About Oil Penny Stocks
Are Oil Stocks Going up?
Ever since the pandemic and the subsequent oil crash, oil stocks have been super volatile. But lately, some oil stocks are starting to show signs of potential recovery.
Oil prices are tracked by the barrel. Right now, a barrel of crude oil is priced in the area of $45. You can buy shares in oil companies. Their prices tend to move in the direction of oil prices.
What’s the Best Oil Company Stock to Buy?
There isn’t one oil company stock I’d consider to be the best. There are some potentially good ones and some you should avoid. The key is to find the stocks that fit your trading strategy.
List of Oil Stocks to Buy
Any of the stocks listed above are oil penny stocks you might want to keep in your watchlist. But make sure to do your research, study the charts, learn the patterns, and keep an eye on breaking news. What may be a great oil stock for others, may not be great for you.
Oil Stocks Under $1
If you want to trade “real” penny stocks — stocks that trade for under $1 — you’ll have to look to the OTC pink sheets. These stocks can be riskier, as they’re unregulated and can be quite volatile. However, if you do your research, you might find an oil penny stock with the right catalyst that fits your trading strategy.
Well, there you have it … 10 oil penny stocks to watch.
These are stocks you might want to keep an eye on as we turn our calendars to 2021.
The best part is you don’t have to have a huge account to trade stocks like this. Start small if you need to, and do your research before you make any trades.
You’ll notice there are a lot of opportunities in penny stock land.
The important thing to remember is that not every penny stock makes for a great trading prospect. You have to make sure that any oil penny stock you want to trade fit your setups.
Ready to learn more about trading stocks? Join the SteadyTrade Team. Every trading day, you’ll get mentorship, trading education, and more. You’ll also be surrounded by a great community of like-minded traders who are pushing to improve in the markets.
It’s all to help you build a process and become a smarter trader.
Which oil penny stocks are on your watchlist? Leave a comment below!