Warren Buffett Doubles Down On Big Oil Amid Tech Crazed Market; BP Surprises With Earnings

Warren Buffett has loaded up on Occidental Petroleum (OXY) stock in the early days of February even as the market appeared to be consumed with tech fever, betting big on Nvidia (NVDA), with earnings reports from “Big Oil” names Exxon Mobil (XOM) and Chevron (CVX) drawing little attention. OXY shares advanced Tuesday.




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Buffett spent around $245.7 million on more than 4.3 million shares of OXY between Feb. 1 and Feb. 5, with a price range of 56.75 to 57.98, according to a regulatory filing late Monday.

Occidental Petroleum stock gained 1% to 57.59 Tuesday during market action. On Monday, OXY shares fell a fraction to 56.98. After climbing to nearly 67 in October 2023, OXY stock has slumped below its 200-day and 50-day moving averages to begin 2024.

Chevron stocks has posted a 3.4% gain so far in February, through Monday’s close. Exxon Mobil is down 1.2%.

Meanwhile, U.S. oil prices traded around $73 per barrel Tuesday as ongoing tension in the Middle East and concern over China’s economy appear to be canceling each other out.


What Do The Exxon Mobil And Chevron Deals Say About The Oil Industry’s Future?


Big Oil Earnings

Occidental Petroleum reports fourth-quarter earnings on Feb. 14.

U.K.-based oil major BP (BP) surged 6% Tuesday on better-than-expected fourth-quarter earnings. This comes after supermajors Exxon Mobil and Chevron also surprised Wall Street with Q4 earnings last week as both energy giants focus on returns for shareholders.

Chevron increased its quarterly dividend by 8% to $1.63, from $1.51 after buying back 5% of it stock in 2023. Exxon Mobil and Chevron handed out a combined $58.7 billion to shareholders last year and expects to continue this focus in 2024. Warren Buffett has a nearly 5.9% CVX stake.

However, XOM and CVX are both trading below their 200-day moving averages to begin the year even as tech stocks have balloon in 2024. As of Monday trade, Nvidia’s 40% run since the end of 2023 has catapulted its market cap to $100 billion — more than all of the S&P 500 energy stocks combined.

Warren Buffett: The OXY Price Target

In December, Warren Buffett spent $588.7 million on more than 10 million shares of OXY stock, with a price range of 55.58 to a fraction more than 57, in the days following the energy company’s $12 billion Permian Basin acquisition.

Through the latter half of 2022 Buffett loaded up on OXY, with the billionaire investor targeting shares in the $57-$61.50 price range. Warren Buffett’s Berkshire Hathaway (BRKB) substantially increased its stake in the international oil play over the past year, putting OXY among Buffett’s top holdings.

 

MarketSmith charts show OXY stock finding price support around the 55-57 range, dating back to June 2022.

Berkshire Hathaway holds a 27.77% stake in Houston-based Occidental Petroleum, according to FactSet. In August 2022, the Federal Energy Regulatory Commission granted Buffett and Berkshire Hathaway approval to purchase up to 50% of available OXY stock.

However, Warren Buffett told shareholders in early 2023 he has no intention of taking over the company. Ahead of earnings Occidental Petroleum Q3 earnings in early November, between Oct. 23-Oct. 25, Berkshire added 3.92 million OXY shares. Buffett made those OXY buys at a share price between 62.68-63.04, according to regulatory filings.

Occidental stock has an 18 Composite Rating out of 99. The Warren Buffett stock also has a 26 Relative Strength Rating and a nine EPS Rating.

Exxon Mobil stock traded up 0.6%.

Please follow Kit Norton on X, formerly known as Twitter, @KitNorton for more coverage.

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