3 Oil and Gas Shares Rising Fast

It's been a dramatic week for stock markets but oil prices have remained range-bound, with the price of a barrel of WTI crude drifting between $95 and $97. In London, the story has been similar -- Brent crude started the week at around $114 per barrel and looks likely to finish at a very similar level, after bouncing off a high of $116.62 and a low of $112.55.

Natural gas prices have proved less robust, though, touching a high of $2.88/mmbtu early in the week, before drifting down to around $2.68/mmbtu on Friday morning. All of this means investors in the United States Oil Fund (NYS: USO) have little to smile about this week, with their fund losing 1.9% over the week to Friday morning, while the United States Natural Gas Fund (NYS: USG) has slipped by 1.2% during the same period.

Oil prices have been high for much of this year, but some junior oil and gas shares have managed to outperform the market by a big margin, highlighting the potential benefits of investing in companies, rather than commodities. Here are three of the top climbers of late:

FX Energy (NAS: FXEN) has gained 48% in the last twelve weeks, rising to $7.48 as it makes solid progress drilling and production testing its wells in Poland's Permian Basin -- an area believed to have substantial gas resources. Gas prices are much higher in Europe than in the U.S., making the area a very commercial prospect for the company.

Gulf Keystone Petroleum (ISE: GKP.L) has gained 14% to 234 pence in the last week. The company -- a favorite with U.K. private investors -- has always had a volatile share price, but the recent entry into Kurdistan of several oil supermajors has boosted confidence that a route to commercial exploitation and export will be found for Gulf Keystone's sizable oil resources.

Circle Oil (ISE: COP.L) has risen 17% to 21 pence over the last month after confirming it has drilled two new producing wells in Egypt and achieved a 53% increase in pre-tax profits over the last six months compared to the same period last year. So far this year, Circle has also commissioned a new pipeline in Morocco and doubled its gas sales to 4.4MMscf/d.

Small oil and gas shares are always volatile, and recent winners could soon turn into losers. To learn more about how to select oil and gas shares with the potential to deliver outstanding profits, I strongly recommend you download the latest special free report from the Motley Fool, "How to Unearth Great Oil and Gas Shares." It's completely free and includes details of how to select shares and structure your portfolio to maximize your potential profits and minimize your risks. Hurry though, as this new report will only be available for a limited time -- so download it today.

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Roland Head does not own any of the shares mentioned in this article.The Motley Fool has adisclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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