Surge in Crude Prices Fuels Bullish Options Trading in OXY
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Should l Buy OXY?
Source: CNBC
- Surge in Options Trading: Ahead of OXY's earnings report, traders have shown a significant appetite for bullish options, with call volumes outpacing puts seven-to-one, indicating strong market optimism regarding the company's future performance.
- Large Trade Activity: One of the day's largest trades involved a trader spending $175,000 to buy nearly 5,000 of the 63-strike calls while selling the same amount of 69-strike calls, reflecting confidence in OXY's stock reaching a new high by the end of the week.
- Supportive Historical Performance: OXY has rallied after 10 of its last 12 earnings reports, including a 10% jump following its February report, providing strong support for a positive reaction to the upcoming earnings announcement.
- Stable Shareholder Structure: Warren Buffett's Berkshire Hathaway owns 27% of OXY, demonstrating long-term confidence in the company, which may attract more investors to consider the stock's growth potential.
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Analyst Views on OXY
Wall Street analysts forecast OXY stock price to fall
16 Analyst Rating
4 Buy
9 Hold
3 Sell
Hold
Current: 55.120
Low
38.00
Averages
47.27
High
64.00
Current: 55.120
Low
38.00
Averages
47.27
High
64.00
About OXY
Occidental Petroleum Corporation is an international energy company with assets primarily in the United States, the Middle East and North Africa. The Company is an oil and gas producer in the United States, including a producer in the Permian and DJ basins, and the offshore Gulf of Mexico. Its segments include oil and gas, and midstream and marketing. The oil and gas segment explores for, develops, and produces oil (which includes condensate), natural gas liquids (NGL) and natural gas. The Company's midstream and marketing segment purchases, markets, gathers, processes, transports, and stores oil (which includes condensate), NGL, natural gas, carbon dioxide (CO2) and power. The midstream and marketing segment provides flow assurance and maximizes the value of its oil and gas. It also optimizes its transportation and storage capacity and invests in entities that conduct similar activities. This segment also includes low-carbon venture businesses.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Debt Paydown Progress: The company has paid down $7.1 billion in debt since the beginning of the year, aided by the sale of its OxyChem business and higher free cash flow, which significantly reduced interest expenses and positioned the company for potential acquisitions, share buybacks, or dividend increases.
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- Leadership Transition: Vicki Hollub, President and CEO of Occidental Petroleum, will retire on June 1, with Richard Jackson succeeding her, marking a significant shift in strategic execution that could influence future business direction and investment decisions.
- Production and Financial Performance: The company achieved an average production of 1.426 million BOE per day in Q1, exceeding guidance, while adjusted earnings per share reached $1.06, demonstrating strong operational execution and positive market conditions.
- Annual Production Guidance Adjustment: Due to disruptions in the Middle East and strategic Enhanced Oil Recovery (EOR) actions, the company has adjusted its full-year production guidance midpoint to 1.44 million BOE per day, reflecting a cautious stance towards market volatility.
- Capital Expenditure and Cash Flow: Occidental maintains a capital guidance range of $5.5 billion to $5.9 billion and generated approximately $1.7 billion in free cash flow in Q1, indicating robust financial health and flexibility for future investments.
See More
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- Debt Repayment Strategy: Occidental Petroleum sold OxyChem to Berkshire Hathaway for $9.7 billion, using over half of the proceeds to pay down debt, significantly improving its financial position and enhancing its resilience in the oil and gas sector.
- Stock Price Rebound: After a 31% decline in stock price during 2024 and 2025, Occidental's stock has rebounded over 45% since the beginning of 2026, indicating a resurgence of market confidence that may attract more investor interest.
- Reduced Capital Expenditure: The company announced a 10% reduction in capital expenditures for 2026 compared to the previous year, with full-year free cash flow estimates nearing $7 billion, which will further enhance its financial flexibility and investment capacity.
- Oil Price Sensitivity Risks: While WTI crude prices have soared above $100 per barrel, ensuring profitability, Occidental's lower diversification compared to competitors poses risks, as future oil price fluctuations could significantly impact its performance.
See More
HSBC Increases Target Price for Occidental Petroleum Corp to $73, Up from $68
HSBC Raises Target Price: HSBC has increased the target price for Occidental Petroleum Corporation from $68 to $73.
Market Implications: This adjustment reflects HSBC's positive outlook on Occidental's performance and potential growth in the oil market.
See More
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- Tech Stocks Rally: The Nasdaq 100 surged 2.08% to reach an all-time high on Wednesday, driven by stellar earnings from chipmakers and AI infrastructure firms, particularly Advanced Micro Devices, which rose over 17% as it raised its full-year sales forecast, reflecting strong investor optimism about ongoing AI investments.
- Crude Oil Plunge: WTI crude oil prices fell more than 7% to a two-week low as market expectations for a US-Iran peace agreement increased, easing inflation fears and contributing to stock market gains, with the 10-year Treasury yield dropping to a one-week low of 4.33%.
- Employment Data Impact: The April ADP employment report indicated that US companies added 109,000 jobs, below the expected 120,000, yet the market remains optimistic about the Fed's monetary policy, believing it will help maintain a low interest rate environment.
- International Market Surge: Overseas stock markets closed sharply higher, with the Euro Stoxx 50 rising 2.68% and China's Shanghai Composite gaining 1.17%, indicating a positive global market response to the US economic recovery, further boosting investor confidence.
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- Mixed Earnings Report: Occidental Petroleum reported a revenue decline of 8.4% to $5.23 billion in Q1, missing expectations, although adjusted profits of $1.06 significantly surpassed the consensus of $0.59, indicating strong operational profitability despite revenue challenges.
- Geopolitical Impact: Reports of Iran considering a U.S. proposal to end the war and reopen the Strait of Hormuz led to oil prices dropping over 12% at one point, negatively affecting the entire oil sector and causing Occidental's shares to fall by 6.7%.
- Production Exceeds Guidance: Occidental produced an average of 1.426 million barrels of oil equivalent per day in Q1, surpassing the high end of its guidance, demonstrating improved operational efficiency despite lower capital spending compared to last year.
- Debt Paydown Progress: The company has paid down $7.1 billion in debt since the beginning of the year, aided by the sale of its OxyChem business and higher free cash flow, which significantly reduced interest expenses and positioned the company for potential acquisitions, share buybacks, or dividend increases.
See More
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- Trump's Recent Talks: Donald Trump has engaged in discussions regarding Iran over the past 24 hours.
- Focus on Iran: The conversations have been characterized as very positive, indicating a potential shift in diplomatic relations.
See More
