Rising Oil Prices Signal Dramatic Shift in Investor Sentiment; Special Report by Penny Stock Detectives
In a recent Penny Stock Detectives article, editor Mitchell Clark points out that July saw an abrupt reversal in oil prices.
(prHWY.com) August 28, 2012 - New York, NY -- In a recent Penny Stock Detectives article, editor Mitchell Clark points out that July saw an abrupt reversal in oil prices, sending the price per barrel back up to $90.00 from $80.00. Clark believes that oil prices are the global financial community's barometer on investor sentiment, and with oil prices now seemingly back on the path to $100.00 a barrel, he expects investor sentiment to take a significant turn for the better.
"Some of the strength in oil prices is due to increased tensions in the Middle East," claims Clark. But noting that there is yet to be a military strike, he notes that "In the absence of war, oil prices are a pretty good gauge on how financial markets feel about the global economy."
Making a comparison to the recent performance of gold stocks, Clark observes most oil stocks are down more than the spot price. Investor sentiment in resources and commodity-related stocks is never rational, he argues, citing Northern Oil & Gas, which is a crude oil and natural gas producer with properties in the Williston Basin in North Dakota and Montana, as an example.
"This stock got hammered during the financial crisis in 2008/2009 and was trading at penny stock status--below $3.00 a share," says Clark, citing the company's web site. "The company's operations, however, continued to be solid, and, eventually, the stock took off commensurate with oil prices."
Clark also notes that investor sentiment really changed for the better with this stock; it appreciated more than ten-fold from early 2009 to early 2011, according to the Penny Stock Detectives editor. More recently, the stock corrected with oil prices, but according to Clark, it has yet to recover with the current spot price.
In Clark's opinion, no matter what the story or how good investor sentiment might be, commodity-related stocks don't really move up unless the underlying spot price does as well. Northern Oil & Gas is a great example of this, claims Clark; the company's operations are strong, but the stock won't go up unless oil prices do as well, he says.
Frankly, Clark says, oil prices have been on a rollercoaster the last few months, and he wouldn't be surprised if they reach $100.00 a barrel shortly, as he believes the marketplace has enough momentum to do so.
"Investor sentiment in oil stocks is another story, just like Northern Oil & Gas proves. In the end, a good portion of the gamble with a resource stock is with the underlying commodity, whether [investors] like it or not," Clark concludes. "It's like trying to figure out where investor sentiment is going to go--it's a very tough thing to bet on."
To see the full article and to learn more about Penny Stock Detectives, visit
www.pennystockdetectives.com.
The editors of Penny Stock Detectives believe low-priced stocks, when researched properly, present investors with great opportunities to accumulate wealth and to increase the value of their investment portfolios. You can learn more about Penny Stock Detectives at
www.pennystockdetectives.com.
###