Occidental Petroleum Stock in Focus After Berkshire Boosts Stake in Energy Company

Shares in Occidental Petroleum (OXY) are in focus Monday after a regulatory filing released late Friday revealed that Warren Buffett’s Berkshire Hathaway (BRK.B) has added to its sizable stake in the oil and gas exploration and production company.

According to a Form 4 filing with the U.S. Securities and Exchange Commission (SEC), the conglomerate purchased 2.6 million shares of Occidental Petroleum between Wednesday and Friday last week, taking its total stake in the company to 250.6 million shares valued at nearly $15 billion based on Friday’s $59.48 closing price.

The purchases, valued at roughly $153 million, give Berkshire 28% interest in the energy producer, through Buffett wrote in the 2023 shareholder letter that the investment firm has no interest in acquiring or managing the company. Rather, he pointed out that he particularly likes Occidental’s vast oil and gas holdings in the United States, as well as its carbon-capture initiatives, while also praising CEO Vicki Hollub’s leadership. 

The famed value investor may have viewed Occidental’s recent retracement of around 15% from its 2024 high as an opportunity to deploy some of Berkshire’s $189 billion cash pile to build its holdings in the company’s stock.

Berkshire’s latest purchase of Occidental Petroleum shares also coincides with the energy producer announcing last week that it had entered into a joint venture (JV) with the conglomerate’s energy unit to extract lithium, a metal used to produce batteries for electric vehicles, consumer electronics, and energy grid storage.

 Monitor These Two Key Levels

Occidental shares have remained entrenched within a trading range since January last year apart from a bull trap in early April this year, a chart pattern that traps investors who have taken long positions in the stock. More recently, the price has fallen below the closely watched 200-day moving average to the lower portion of the range on below-average volume, potentially indicating slowing selling momentum.

However, if the stock continues to decline, investors should keep a close eye on the $56 level, an area where the price would likely find buying interest near the trading range’s lower trendline. Conversely, on a move to the upside, monitor the range’s top trendline at $67.50 as a possible key resistance area.

Occidental shares were up 1.2% at $59.96 about two hours before Monday’s opening bell.

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As of the date this article was written, the author does not own any of the above securities.