Occidental Petroleum (NYSE: OXY), a favorite of Warren Buffett’s Berkshire Hathaway (NYSE: BRK.A), continues to record losses even as the billionaire maintains confidence in the company.
OXY has taken another hit after the equity fell to its lowest since December 2024. The stock closed at $46.65 on January 31, down 4.64% on the day, marking a significant retreat from recent highs when OXY attempted to hold above the $50 mark.
The stock’s price has been volatile over the past six months, as per analysis by Barchart in an X post on February 2. After peaking near $60 in August 2024, OXY experienced multiple pullbacks, falling steadily throughout November and December.
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“Warren Buffett can’t seem to save Occidental Petroleum – OXY has fallen to its lowest price since December and is approaching Warren Buffett’s latest purchase price, which marked a local bottom,” Barchart stated.
The lowest point came on December 19, when Berkshire Hathaway purchased $400 million worth of shares, lifting the stock. However, OXY’s recovery was short-lived, and the equity is now rapidly approaching its low point in December once again as it remains below the 200-day moving average (MA).
At the same time, data provided by charting platform TrendSpider indicated that the stock’s relative performance against the S&P 500 has also been weak despite Buffett’s steady accumulation.
Buffett’s confidence in Occidental Petroleum
Berkshire owns 264 million Occidental shares worth $12 billion, a 28% stake. Along with Chevron (NYSE: CVX), it is one of Berkshire’s key energy investments. Notably, Buffett has been selective about buying more since June 2024. He previously stated he doesn’t intend to acquire all of Occidental but admires its CEO, Vicki Hollub. Some investors still hope for a full buyout.
Indeed, amid OXY’s troubled stock performance, the company still has several underlying fundamentals that are likely to spur growth in the future. For instance, its presence in the Permian Basin strengthens its assets, boosting production potential and cost efficiency.
Additionally, a second Donald Trump administration could further benefit Occidental through deregulation, fostering increased drilling opportunities.
The firm’s investment in direct-air-capture (DAC) technology positions it as a carbon reduction leader. This technology could drive revenue for the company, given that Microsoft’s (NASDAQ: MSFT) agreement to buy 500,000 metric tons of removal credits highlights its potential.
On the other hand, Occidental plans to sustain a five-rig program in its CrownRock assets through 2025, targeting mid-single-digit production growth, with Q4 output expected to hit 1.45 million barrels of oil equivalent per day.
Occidental revenue estimates
Meanwhile, the stock’s potential recovery is likely to be impacted by the projected revenue decline for the oil giant. Specifically, Occidental Petroleum expects a 6.70% revenue drop in Q4 2024 to $7.02 billion but a 13.78% rebound in Q1 2025 to $6.84 billion. Full-year 2024 revenue is forecast at $27.17 billion (-6.04%), with a 3.49% growth to $28.12 billion in 2025.
Occidental Petroleum is generally struggling with losses and weak stock performance, but Buffett’s continued investment signals confidence in its long-term potential.
It could recover if the company meets its growth targets, particularly in production and carbon capture. Despite current challenges, Buffett’s stake suggests optimism for the future.
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