Falling Oil Prices Weigh on Occidental Petroleum Stock

OXY is seeing well-priced premiums at the moment

Assistant Editor
Sep 20, 2021 at 10:17 AM
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    The oil sector is seeing pressure today as crude prices fall, weighed down by a hardening U.S. dollar, and the China property market, while U.S. Gulf oil output started up again following hurricane damage. One of these energy names, Occidental Petroleum Corporation (NYSE:OXY) stock was down 4.2% to trade at $25.80 at last check. 

    The 100-day moving average, which kept a tight lid on the shares for the past month, flipped into support last week. However, today's negative price action has OXY testing that trendline. Year-to-date, the equity is still up 48.6%. 

    Of the 19 analysts in coverage, eight carry a "strong buy" rating on Occidental Petroleum stock, with nine at a "hold" and two at a "strong sell." Meanwhile, the 12-month consensus price target of $34.40 is a 34.3% premium to current levels. 

    Over in the options pits, though calls are winning out on an absolute basis, puts are much more popular than usual. This is per OXY's 10-day put/call volume ratio of 0.37 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than 90% of readings from the past year. 

    That said, speculating on the security's next move with options could be a prudent play. The stock's Schaeffer's Volatility Index (SVI) of 51% stands higher than just 11% of all other readings in its annual range, implying that options players are pricing in relatively low volatility expectations at the moment. 

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