• Occidental Petroleum and other oil drillers have been dropping due to President Biden's attempt to reduce prices.
  • OXY stock dropped 3.6% to $55.77 on Wednesday.
  • Warren Buffett's Berkshire Hathaway bought another 9.6 million shares over past week.

Occidental Petroleum (OXY) shed another 3.6% on Wednesday. Despite news surfacing that Warren Buffett's Berkshire Hathaway had purchased 9.6 million shares in the past week. President Biden's continued talk of a raft of new proposals to reduce the price of gasoline has many saying it will not work but also a general tenor that the government may do what it takes to reduce oil prices. Additionally, the American Petroleum Instititute (API) released its weekly crude inventory figures on Wednesday, which surprised the market with a large rise in crude.

Also read: Walmart deep dive analysis & price target

Occidental Stock News: Inventory build overshadows Buffett

API's data on Wednesday showed a nationwide build of 5.6 million barrels. This was way off expectations for a decrease in inventory of more than 1.4 million barrels. In fact, analysts were off for the second week in a row. The prior week saw a build of some 736,000 barrels as analysts predicted a drop of 1.2 million barrels. Gasoline inventories also rose by 1.2 million barrels on the week. Gasoline refining has been one of the most important bottlenecks causing high prices at the pump.

The news came on the heels of President Biden sending a bill to Congress that would temporarily waive the federal gas tax to help reduce prices for consumers. A member of the opposition, John Thune, said the bill was "dead on arrival," but the more significant policy of the Biden administration has been releasing barrels from the US Strategic Petroleum Reserve (SPI). Just last week the government released 6.8 million more barrels. The President is intent on reducing the price of gasoline ahead of midterm elections in November.

Meanwhile, Occidental has gotten a lot of focus as news appeared last night that Berkshire Hathaway had purchased another 9.6 million shares of the independent major. The gigantic holding company, revered for its stock picks, spent approximately $529 million on the shares, which boosted its overall stake in OXY to 16.3%. This one is looking more and more like a long-term hold for Buffett rather than a strategic play. Berkshire now owns more than $8.5 billion of equity in the company, even though shares are down by a fifth since the peak in May.

Occidental Stock Forecast: OXY heading down at least to $52.

Simply put, OXY stock is offering a bad time to get in. OXY is nowhere near support, which sits all the way down at $48 or $42.34. On the other hand, since seeing its price collapse this month, OXY share price is now below two major sources of resistance. These are $58.75, which was quite significant back in March, and $63.56, which has been a touchstone in April and May. Additionally, the Moving Average Convergence Divergence (MACD) is showing a crossover in the wrong direction below the zero bound.

The FXStreet take is that this one will drift down to $52 before descending to $42.34 in the next few months. Recessions tend to have heavy effect on oil prices.

OXY daily chart


Like this article? Help us with some feedback by answering this survey:

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

EUR/USD rebounds, steadies above 1.0400

EUR/USD rebounds, steadies above 1.0400

EUR/USD has staged a rebound and reclaimed 1.0400 during the American trading hours on Friday with the US Dollar Index retreating from the multi-week high it set at above 105.60. Nevertheless, the pair remains on track to close the week in negative territory. 

EUR/USD News

GBP/USD climbs to 1.2050 area, looks to post weekly losses

GBP/USD climbs to 1.2050 area, looks to post weekly losses

GBP/USD reversed its direction and advanced to the 1.2050 area after having dropped to 1.1976 earlier in the day. The pair is still down more than 1% on the day with safe-haven flows dominating the financial markets following the disappointing PMI data from the US.

GBP/USD News

Gold rebounds above $1,800 as US yields fall sharply

Gold rebounds above $1,800 as US yields fall sharply

Gold has regained its traction and recovered above $1,800 after having slumped to a multi-month low below $1,790. Following the dismal PMI data from the US, the benchmark 10-year US Treasury bond yield is down more than 6% on the day, fueling XAU/USD's rebound.

Gold News

Why traders are rushing to exit positions on Cardano’s ADA price

Why traders are rushing to exit positions on Cardano’s ADA price

Cardano (ADA) price has had its performance review as the summer kicks off. ADA bulls are returning home with not-that-good a scorecard, and the underperformance could cut short holiday funding for the cryptocurrency.

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!

BECOME PREMIUM

Forex MAJORS

Cryptocurrencies

Signatures