3 Oil Stocks Making Moves as Crude Prices Fall

Crude prices have pulled back in recent sessions

Deputy Editor
Oct 5, 2023 at 12:49 PM
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Shares of oil stocks were under pressure before the start of the session, as crude prices fell amid demand outlook worries following reports of a large increase in U.S. gasoline inventories. The anxiety surrounding demand overshadowed news that the Organization of the Petroleum Exporting Countries (OPEC+) decided to maintain oil output policy.

Call Traders Buying XOM's Dip

Exxon Mobil Corp (NYSE:XOM) stock was last seen 2.3% lower at $108.89. Just five sessions removed from its all-time high of $120.70, XOM is now trading below its 60-day moving average that served as a safety net throughout August. Today's pullback also put the security just below its year-to-date breakeven mark.

Call traders seem to be speculating that this is a short term pullback, as the 62,000 bullish bets traded so far today are nearly double the average intraday volume. New positions are opening at the top three most popular positions, led by the weekly 10/6 110-strike call that expires at tomorrow's close.

Is it Time to Sell OXY?

Occidental Petroleum Corporation (NYSE:OXY) is down 1% to trade at $59.46 at last check. Shares yesterday fell below support at their 180-day trendline, and closed below $60.50 for the first time since July. OXY carries a 12.4% year-over-year deficit.

Short-term options traders are likely cheering the recent slip. This is per the security's Schaeffer's put/call open interest ratio (SOIR) of 1.19 that sits in the high 93rd percentile of annual readings. This points to a put-bias amongst bettors. What's more, Occidental Petroleum stock's Schaeffer's Volatility Scorecard (SVS) sits at an extremely low 2 out of 100, making it a prime selling candidate. 

Options Traders' Sentiment Shifting on CVX

The shares of Chevron Corporation (NYSE:CVX) are faring better than its peers, last seen up 0.3% at $163.56. CVX still carries an 8.8% year-to-date deficit, though, and is facing pressure from its 260-day moving average that provided support in September.

A look at the options pits shows that over the last 10 weeks, calls outpaced puts at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). However, the latter are gaining traction, per CVX's 10-day put/call volume ratio of 0.91, which stands in the elevated 87th percentile of reading from the past 12 months.

 

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