Senex Energy Ltd (ASX: SXY) has been one of the market's bounders over the last week with rampaging oil prices driving the stock a remarkable 36% in just three trading days.
Between Monday and Wednesday, the stock surged from 27.5 cents to 37.5 cents, easily outperforming the benchmark S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) in that time. Indeed, a 20% jump in oil prices as well as an unexpected interest rate cut from the RBA would have worked wonders for the market's confidence in the stock.
However, oil prices were once again biting the dust overnight on renewed fears of a global oversupply problem, leading to heavy selling pressure around the stock. Within minutes of the market's opening, the stock had fallen more than 10% to be trading back at 33.7 cents. If you own shares in the producer, you may want to look away now.
Source: Google Finance
Unfortunately, there is no way of knowing which direction oil prices will head next. If there's one thing that's for certain though, the energy sector remains an extremely risky one for investors to be exposed to.
