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3 Oil and Gas Shares Rising Fast

The Fed's decision to launch QE3 put a rocket under oil prices on Thursday night, with WTI crude touching $100 before U.S. markets opened on Friday morning. Brent crude behaved in a similar fashion, soaring toward $118 per barrel before settling back at around $117 in London trading on Friday afternoon. Natural gas also had a strong week and managed to rise above $3/mmbtu midweek.

As a result, the United States Oil Fund  (NYSE: USO  ) was up by 4.1% on the week when markets opened on Friday morning, with the United States Natural Gas Fund  (NYSE: UNG  ) also making strong gains and opening up by 7.9% on Friday.

The nature of oil and gas companies' businesses means that they may succeed or fail regardless of oil prices. Despite this, strong oil prices always help, and my three risers this week are all well positioned to benefit from high oil prices.

Essar Energy  (LSE: ESSR.L  ) gained 22% this week to 126 pence, rising fast on news that a long-running tax dispute at home in India has been settled. The feel-good factor was reinforced when the Indian government announced a rise in diesel prices -- which it controls -- on Friday, raising hopes that India's heavily regulated energy market might be allowed to function more freely. Today's rising oil prices will have done Essar's share price no harm, either.

Coastal Energy  (LSE: CEO.L  ) has climbed 25% this month, taking its share price to 1,175 pence. Good old-fashioned success at the drill bit lies behind Coastal's rise. Its recently completed Songkhla A-10 well was described as "outstanding" with a "record amount of net pay" by the company's CEO; it will go into production shortly, with other wells in the same basin to follow.

BPZ Resources  (NYSE: BPZ  ) gained 13% to $3.07 this week after confirming that the company's Corvina CX-15 platform has arrived in Peru and is en-route to the Corvina oil field. Drilling operations to develop the Corvina oil discovery are expected to start in late October and investors are optimistic about the potential of this field.

Small oil and gas shares are always volatile, and this week's winners could be next week's losers. To learn more about how to select oil and gas shares with the potential to deliver outstanding multi-bagging 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, 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 a disclosure 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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