This year has seen the energy industry produce negative oil prices and the collapse of one of its oldest and biggest companies. Alternative energy is more mainstream than ever, but fossil fuels still make up about 80% of the energy production in the U.S. Coal is down, but natural gas and nuclear energy production are both up and at record-high production levels.
There are new opportunities for investors in renewable energy, with solar and wind production leading the way to new highs in consumption and production for the subsector. Transportation led end-use sectors in consumption with 28.2 quads of primary energy and electricity purchased in 2019.
All of this means that plenty of money is moving through the energy sector. There are more small companies than ever attempting to service the growing energy needs of an expanding global population. The penny stock market is a great way to leverage your money to profit from the world’s energy use.
Overview: Energy Penny Stocks
There are plenty of penny stocks to trade today, but this was not always the case. The 1970s brought us the beginning of the liberalized energy market. Before then, petroleum dominated both energy consumption and production, and production was dominated by the Seven Sisters — BP, Gulf Oil, Royal Dutch Shell, Standard Oil Company of California (now Chevron), ExxonMobil, Standard Oil Company of New York and Texaco (merged into Chevron).
The energy market is always one of the most affected during an economic crisis or pandemic. The oil crisis of 1973 marked the rise of OPEC and the first genuine threat to the Seven Sisters oligarchy. As different parts of the world began to understand the benefits of energy localization, international authorities began to actively break up and avoid oligopolies. The 2008 economic crisis caused many nations to overhaul their energy consumption and importation policies, pressuring petroleum exporters for fairer treatment.
The COVID-19 pandemic continues to help break up centralization in the energy industry. Newer, cheaper forms of energy are now becoming more viable, further reducing the influence of formerly dominant companies like ExxonMobil (NYSE: XOM) and BP (NYSE: BP). There is now room for companies like First Solar (NASDAQ: FSLR), NextEra Energy (NYSE: NEE) and Brookfield Renewable Partners (NYSE: BEP) to hold a substantial portion of the market alongside them.
Innovations such as blockchain energy also create room for small companies to serve local and regional energy needs with lower barriers to entry.
Best Online Brokers for Energy Penny Stocks
Making money in energy is much easier when you have an intuitive and reliable trading platform to execute your trades. Having a great investment strategy is one thing, but one bad input or unfortunate stretch of downtime can erase the benefit of all of your research and planning. It is always a good idea to test your ideas and execution strategy in a virtual account to learn how to trade penny stocks — execution is everything in this market. Compare the features of the brokers below to determine which one is right for you.
Intermediate Traders and Investors
Change Means Change
Energy is essential, so any change in the industry just means money is moving around. When money is moving, you have a chance to profit. The winners in energy investment are the people who take the time to research the industry and follow the money.
Whether you join the revolution of alternative energy or choose to squeeze your profits from oil and gas, there is money to be made on both sides. Beware volatility post-COVID as the world decides whether it will go back outside or stay in, and always do your due diligence on the individual companies that are on your radar.
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