Occidental Petroleum has become one of the biggest purchases by the Berkshire Hathaway fund run by legendary investors Warren Buffett and Charlie Munger. Buffett has repeatedly said that buying Occidental Petroleum shares is his long-term bet on rising oil prices, which benefit the company's margins. The company has operations in the United States. As such, Occidental is now already in the top 10 'holdings' of the Berkshire fund, which owns more than 15.2% of the company's total shares. Berkshire has also increased its position in the shares of US oil giant Chevron.
The average price of a barrel of oil in Q1 rose from 61.10 USD in 2021 to nearly 97.36 USD, according to the Wall Street Journal.
Last week, Buffet also known as the 'Oracle of Omaha' made another purchase of more than 900,000 shares of Occidental Petroleum.
Occidental Petroleum (OXY.US), MN chart. The company's stock has risen rapidly already rebounding nearly 1,300% from its March 2020 low as the oil market contracted amid a drastic drop in demand for crude. Currently, oil is attracting investor attention, through the EU embargo on Russian crude and the crisis in supply chains. 'Black gold' prices are gaining along with gasoline and distillate prices, which Occidental Petroleum also supplies. The latest U.S. inventory report appeared to add fuel to the gains of oil companies due to a large drop in gasoline and distillate stocks. Shares of OXY.US are approaching the 61.8 Fibo retracement near 73 USD where the price could encounter serious resistance. At the same time current valuations are at levels from 2008, which illustrates the decline in sentiment towards companies from the energy sector in recent years, and may indicate that the company's valuations are still potentially attractive, especially if we take into account the changing value of money over time and a decline in its purchasing power. Occidental's Q1 2022 results came in above analysts' expectations. The first support in case of declines is located in the vicinity of about 50 USD, where we see 38.2 Fibonacci retracement. Source: xStation5
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